The European Union’s Carbon Border Adjustment Mechanism, commonly known as CBAM, has moved from transition to implementation.
For producers outside the European Union, EU importers and companies trading CBAM-covered goods, the focus is increasingly shifting from understanding the regulation to demonstrating readiness: identifying products in scope, establishing monitoring plans, calculating embedded emissions, engaging suppliers, preparing data for verification and understanding the financial implications of different compliance strategies.
In a recent AmSpec webinar, “What’s Next for Carbon Border Adjustment Mechanism (CBAM) Compliance?”, Dr. Gillian Dagan, Executive Vice President of Business Assurance & Sustainability at AmSpec, and Dr. Hong Jin, a CBAM expert within AmSpec’s Business Assurance & Sustainability team, discussed what businesses should be doing now.
Watch the full webinar replay below for the complete presentation and live Q&A.
Key CBAM Takeaways
For organizations potentially affected by CBAM, five points stand out:
- CBAM compliance is now an operational issue, not simply a future regulatory concern.
- Producers seeking to use actual emissions values need credible monitoring systems, calculations, documentation and verified data.
- Reliance on default emissions values may simplify certain reporting requirements, but can result in greater calculated emissions exposure.
- Supply chain data can become a major readiness bottleneck, particularly where precursor information is required.
- Companies that prepare early have more opportunity to identify data gaps, improve processes and consider longer-term emissions reduction strategies.
As Dr. Hong Jin summarized during the webinar:
“Don’t panic, but prepare early.”
What Is CBAM?
The Carbon Border Adjustment Mechanism is an EU environmental policy designed to place a carbon cost on the embedded emissions associated with certain goods imported into the European Union.
Its purpose is to reduce the risk of carbon leakage and create greater equivalence between the carbon costs faced by EU producers under the EU Emissions Trading System and those associated with imported goods.
CBAM currently covers selected goods within six sectors:
- Cement
- Iron and steel
- Aluminium
- Fertilisers
- Electricity
- Hydrogen
The definitive CBAM regime began in 2026, creating new monitoring, reporting and financial obligations for covered imports.
For many businesses, that means the central question has changed.
It is no longer simply, “Does CBAM apply to us?”
It is increasingly, “Can we demonstrate compliance using reliable data when required?”
Who Is Responsible for CBAM Compliance?
CBAM involves several parties across the international supply chain, and their responsibilities are different.
Non-EU Producers
Producers of CBAM-covered goods may need to establish the information necessary to calculate the embedded emissions associated with their products.
Where actual emissions data are used, producers should be prepared to support the calculation through appropriate monitoring methodologies, records, supporting documentation and verification.
This makes CBAM relevant well beyond an organization’s sustainability department. Operations, procurement, engineering, finance, quality, environmental teams and commercial leadership may all hold information required to support a defensible emissions calculation.
EU Importers and Authorized CBAM Declarants
On the EU side, authorized CBAM declarants are responsible for CBAM declarations and the associated certificate obligations.
That makes reliable emissions information from non-EU suppliers commercially important to importers.
A producer’s ability to provide credible CBAM information may therefore increasingly become part of the relationship between supplier and customer.
How Are Embedded Emissions Calculated Under CBAM?
At a high level, CBAM considers the greenhouse gas emissions embedded in covered imported goods.
Depending on the product and applicable methodology, this can include direct emissions associated with production as well as relevant indirect emissions.
Examples discussed during the webinar included:
Direct emissions
- Fuel combustion
- Flaring
- Venting
- Fugitive emissions
- Emissions associated with production processes
Indirect emissions
- Relevant emissions associated with electricity consumed during production
Calculating embedded emissions can also require consideration of precursor materials used to manufacture the final product.
This is one reason CBAM readiness can quickly become a supply chain data challenge rather than simply a calculation exercise.
Actual Emissions Data vs. CBAM Default Values
One of the most important strategic decisions discussed during the webinar was whether an organization relies on applicable CBAM default values or develops the systems necessary to support actual emissions data.
Default values can offer a degree of simplification because actual-value verification requirements do not apply in the same way.
However, default values are designed to prevent the underestimation of emissions. Depending on the product and applicable rules, their use can therefore result in greater calculated emissions than a company’s actual production performance would support.
During the webinar, AmSpec presented an illustrative steel-production example in which using site-specific emissions values resulted in substantially lower modeled CBAM exposure than relying on applicable default values.
The broader lesson is not that every producer will achieve the same percentage reduction.
It is that companies should understand the financial difference between default and actual values before deciding how they will approach CBAM.
For relatively carbon-efficient producers, reliable actual data may become a competitive advantage.
What Does CBAM Verification Involve?
Verification was one of the biggest areas of interest during the webinar’s live Q&A.
When actual emissions data are used where verification is required, the process can extend significantly beyond checking a spreadsheet.
The discussion highlighted several elements businesses should be prepared for:
- Review of the facility and relevant production activities
- Review of the CBAM monitoring plan
- Examination of embedded-emissions calculations and methodologies
- Identification of relevant personnel and data owners
- Review of original supporting evidence
- Site-level verification activities where required
- Identification of discrepancies, data gaps or other issues
- Resolution of identified issues
- Assessment for material misstatements or non-conformities
- Completion of the verification reporting process
This is one reason waiting until a reporting deadline approaches can create significant risk.
A company’s emissions calculation may depend on information held across multiple departments, facilities and suppliers. Finding those gaps early provides time to resolve them.
Why Does Equipment Calibration Matter for CBAM Verification?
One live attendee asked specifically about equipment calibration.
Dr. Jin explained that meters and monitoring equipment used to support relevant production data should have appropriate quality controls and calibration practices.
Organizations should be prepared to demonstrate that equipment has been maintained and calibrated according to applicable requirements or manufacturer recommendations, with evidence such as electronic calibration histories, maintenance records or equipment tags where appropriate.
The practical takeaway is simple:
CBAM data quality ultimately depends on the systems that generate the underlying data.
A technically correct calculation can still create verification challenges if the original measurements cannot be adequately supported.
What If Suppliers Cannot Provide Actual Precursor Data?
Another attendee raised an increasingly important supply chain question: What happens when a producer purchases precursor materials but cannot obtain actual emissions information from the supplier?
Recent EU guidance provides additional requirements concerning the treatment of precursors and the circumstances in which default or actual information may be used.
For affected companies, the bigger operational lesson is to start supplier engagement early.
Do not assume that a request for emissions information can be satisfied immediately.
Suppliers may need to:
- Determine whether they have the necessary data
- Align their calculation methodology with CBAM requirements
- Address missing data
- Prepare supporting records
- Complete applicable verification steps
Every dependency adds time to the compliance process.
As Dr. Dagan noted during the Q&A, companies are relying on their supply chain partners to move quickly when information is requested. That makes supplier readiness part of your own CBAM readiness.
Can Existing GHG Data Be Used for CBAM?
Possibly, but existing greenhouse gas inventories should not automatically be assumed to satisfy CBAM.
During the Q&A, Dr. Jin recommended comparing existing methodologies against EU ETS and current CBAM requirements.
Organizations already reporting emissions under another program may have a significant head start, but system boundaries, calculation methodologies, data quality and supporting evidence still need to align with CBAM requirements.
A useful readiness exercise is therefore to ask:
What information do we already collect, and what would need to change for that information to be CBAM-ready?
The Biggest CBAM Mistake: Waiting
When asked about the biggest mistake companies are making, Dr. Jin’s answer was straightforward: taking no action.
Companies already preparing for CBAM are:
- Identifying emissions sources
- Assessing data gaps
- Reviewing precursor information
- Evaluating monitoring plans
- Aligning internal teams
- Preparing for future verification
- Evaluating their potential financial exposure
Organizations that wait may eventually find themselves trying to address all of these issues at once.
The challenge is particularly significant when information must come from third parties.
Time spent now can reduce uncertainty later.
New EU CBAM Guidance Provides More Detail
The European Commission published a significant package of new guidance for non-EU installation operators on August 14, 2026.
The documents cover areas including:
- Core CBAM concepts
- Guidance for non-EU operators
- Calculation of embedded emissions
- Free allocation adjustments
- Cement
- Hydrogen
- Fertilisers
- Iron and steel
- Aluminium
- Electricity
Additional guidance addressing CBAM verification and accreditation for verifiers and National Accreditation Bodies was published on August 24, 2026.
For organizations building their CBAM compliance systems, these documents provide considerably more detailed direction on how the definitive regime should operate.
A Five-Step Framework for CBAM Readiness
AmSpec approaches CBAM readiness through five practical stages.
1. Assess
Determine whether your goods and trade flows fall within CBAM requirements.
Identify affected products, CN codes, facilities, customers and supply chains.
2. Quantify
Identify relevant emissions sources and determine how the required information will be measured, calculated and documented.
Compare actual emissions data with applicable default-value scenarios to understand potential exposure.
3. Engage
Identify the suppliers, internal teams and other parties that control information required for compliance.
Begin those conversations before reporting or verification deadlines create urgency.
4. Report
Establish a repeatable monitoring and reporting framework that aligns with applicable CBAM methodology and documentation requirements.
5. Optimize
Once a reliable baseline has been established, evaluate whether operational improvements, lower-carbon energy sources, different precursors or broader decarbonization initiatives could reduce embedded emissions and future CBAM exposure.
Frequently Asked Questions About CBAM Compliance
When did the CBAM definitive regime begin?
The definitive CBAM regime began in 2026 following the transitional phase that started in October 2023.
Which industries are currently covered by CBAM?
CBAM currently covers selected goods in the cement, iron and steel, aluminium, fertiliser, electricity and hydrogen sectors.
What is the CBAM de minimis threshold?
A 50-tonne annual mass-based threshold applies across covered goods in the iron and steel, aluminium, fertiliser and cement sectors. Electricity and hydrogen are treated differently under the regulation.
Do actual CBAM emissions values need to be verified?
Where importers report actual embedded emissions values, applicable emissions data must meet CBAM requirements and verification requirements apply.
Are CBAM default values allowed?
CBAM provides default values that can be used subject to applicable rules. However, companies should evaluate the financial implications of relying on defaults compared with verified actual emissions values.
Can data from another greenhouse gas program be used for CBAM?
Existing emissions data may be useful, but the underlying methodology, boundaries and data quality must align with applicable CBAM requirements. Existing reporting should therefore be assessed rather than assumed to be compliant.
What should a company do first if it is not CBAM-ready?
Begin by determining your regulatory exposure, identifying the products and facilities involved, mapping relevant emissions sources and data owners, and identifying gaps in your monitoring and supply chain information.
Get Ready for CBAM
CBAM readiness is not simply about completing a future declaration.
It is about building a defensible system for understanding products, emissions, suppliers, data, documentation and potential financial exposure.
AmSpec’s Business Assurance & Sustainability specialists provide CBAM Readiness Workshops designed around an organization’s actual operations and supply chain.
The workshop can include:
- CBAM regulatory overview
- Exposure assessment
- Data collection and emissions calculation review
- Product-level calculation walkthroughs
- Supply chain engagement strategy
- Reporting framework development
- Identification of potential optimization opportunities
When decisions can’t wait, AmSpec delivers.
Contact AmSpec to discuss your CBAM exposure and determine the next steps toward readiness.