CBAM (the Carbon Border Adjustment Mechanism) is the EU's instrument against "carbon leakage": it prices the embedded emissions of imported, carbon-intensive goods so that production inside and outside the EU competes under the same climate burden. This directly affects importers and indirectly the supplier manufacturers.
Which products are affected?
CBAM initially focuses on the most carbon-intensive sectors:
- iron and steel,
- aluminium,
- cement,
- fertilisers,
- hydrogen,
- electricity.
The scope may broaden over time. If you import these (or a product containing them), CBAM may apply to you.
What needs to be done?
The essence of CBAM is reporting embedded-emissions data: how much CO₂ was generated when the imported goods were produced. This requires:
1. data collection from the supplier (production emissions), 2. reporting into the CBAM system, 3. in the definitive phase, purchasing CBAM certificates for the emissions.
The common denominator: emissions data
CBAM, the ESPR/DPP and the Battery Regulation all ask for the same data in a different form: the product's carbon footprint and production emissions. Once you organise your CO₂ data across the supply chain, the same effort serves several regulatory obligations.
That is why it is worth managing CO₂ and supply-chain data in one structured place — not separately for CBAM and separately for the DPP.
The importer's challenge
- The supplier (often outside the EU) does not necessarily provide ready-made emissions data.
- Using default values can be more expensive than actual data.
- Communication with the supplier is crucial.
How to prepare
1. Product-sector mapping: which of your imports are CBAM-affected? 2. Supplier data clause: ask for actual production emissions. 3. Data structure: link CO₂ data to the product (together with the DPP). 4. Process: who is responsible for CBAM reporting and the DPP carbon footprint — ideally the same source.
Frequently asked questions
Are CBAM and the DPP the same?
No, but their data needs overlap (carbon footprint, production emissions). It is worth serving both from a single data source.
From when is certificate purchase mandatory?
CBAM is phased in; the financial phase follows the transitional reporting period.
Does it affect SMEs too?
If you import from a CBAM sector, yes — watch the volume thresholds.
One dataset, multiple compliances. ReadyPass helps you manage CO₂ and supply-chain data in a structured way — for the DPP and the obligations around it.
Sources: CBAM (EU) 2023/956; ESPR (EU) 2024/1781. Informational, not tax advice.
