This tool enables you to measure and understand the embedded emissions of products affected by the Carbon Border Adjustment Mechanism (CBAM). By following a structured approach, you can ensure compliance with CBAM regulations while gaining valuable insights into your product’s carbon footprint.
What is CBAM?
The Carbon Border Adjustment Mechanism (CBAM) is a regulatory framework designed to prevent carbon leakage by ensuring that imported goods are subject to the same carbon pricing as goods produced within the EU. It applies to emissions embedded in the production of specific goods such as steel, aluminium, cement, fertilizers, and electricity.
CBAM at a glance:
Focuses on imported goods and their embedded emissions.
Requires accurate data on emissions from the production process to ensure fair carbon pricing.
Promotes sustainable production practices globally by applying consistent carbon regulations.
💡 Why CBAM matters: For exporters, understanding and calculating CBAM emissions is crucial to avoid penalties, maintain market access, and promote sustainable business practices.
5 Steps to Calculate CBAM Emissions
To calculate CBAM emissions effectively, you’ll need to follow these key steps:
Create Locations - Define the production facilities or regions where your goods are produced. This step ensures all emissions are tied to the correct geographic and regulatory context.
Create Products - Add the products affected by CBAM to the system and classify them using their CN codes and aggregated goods categories (AGCs). This step ensures proper reporting for each product under CBAM rules.
Create Assessments - Assessments are used to calculate emissions for specific AGCs. Each assessment includes a reporting period, production method, and associated location.
Collect Relevant Data - Gather and enter data required for emission calculations, such as raw material usage, fuel consumption, electricity consumption, and production outputs. The data collected depends on the AGC and the type of product.
Run Calculations - Once data collection is complete, run the calculations to generate embedded emissions results. These results can then be used for regulatory reporting and sustainability insights.
💡 Pro Tip: Save drafts during data collection and revisit them later to ensure all data points are accurate and complete before running calculations.
Why Calculating CBAM Emissions is Important
Measuring CBAM emissions is essential for businesses exporting goods to the EU, as it ensures compliance with evolving carbon pricing mechanisms. Here’s why:
Regulatory Compliance: Accurate CBAM calculations are required to meet EU reporting and payment obligations. Failure to comply may result in penalties or market restrictions.
Transparency: Understanding the emissions embedded in your products helps build trust with customers and regulators.
Sustainability Strategy: Identifying emission hotspots enables businesses to target reductions and adopt more sustainable production methods.
Conclusion
Calculating CBAM emissions is vital for businesses exporting goods to the EU. With a clear process for creating locations, products, assessments, and collecting data, you can ensure compliance, improve transparency, and support sustainability goals. Our tool is designed to simplify this process, empowering your business to focus on reducing emissions and maintaining competitive market access.