Carbon Border Adjustment Mechanism (CBAM) Support

Once a product carbon footprint has been established and verified, companies can choose to have a product carbon neutral certified according to SCS’s own industry-leading standard, the Certification Standard for Carbon Neutral Entities, Buildings, Products, and Services or the internationally recognized carbon neutral standard, PAS 2060. In this way, companies can certify that they have successfully negated their product carbon footprint.

As part of the certification process, SCS provides guidance on purchasing verified carbon offsets from credible sources that align with the company’s mission and verifies the retirement of purchased carbon offsets to achieve carbon neutrality. In addition and as part of the ongoing requirements to maintain carbon neutral status, SCS provides guidance on how to achieve further reductions in the product’s carbon footprint over time. Learn more here.

The SCS CBAM Technical Team is available to help companies navigate the EU CBAM regulations. Our experts can help to educate corporate stakeholders on a variety of CBAM topics related to your specific business and products including but not limited to:

• Comprehensive CBAM training covering all aspects of the regulation as it applies to your company, industry and products
• Identification of products produced within your corporate holdings that fall under the CBAM regulation
• Understanding the calculation and reporting of emissions requirements for identified products, the methodologies that can be used, and the implications on supply chains, both upstream and downstream
• Cost analysis for potential impact beginning in 2026 when CBAM certificates will be required to offset product emissions
• How to navigate the CBAM Transitional Registry and the mechanisms for purchasing CBAM certificates (credits)
• Understanding the role of the EU Emissions Trading System in the pricing of CBAM certificates, how prices will fluctuate and how your products will be taxed
• Understanding future products that may be impacted by the CBAM regulation as the product scope is expanded over time

SCS offers a comprehensive line of sustainable supply chain management services that can help companies mitigate supply chain risk and enable advanced emissions reporting for an entire supply chain, both upstream and downstream. In addition, SCS can work all the way down the supply chain to develop accurate and science-based carbon inventories for your suppliers, including the certified responsible mining of raw materials, outsource transportation and distribution, raw material processors and manufacturers of finished goods that fall under the CBAM regulations and more.

SCS has more than two decades of experience in developing systems to collect data from suppliers, analyze their information, verify compliance to supplier criteria, and report, whether it is for internal supply chain management or to meet regulatory requirements such as CBAM. 

SCS can support your organization’s efforts to build a sustainable supply chain strategy through the following: 

• Supplier Data Collection
• Developing Key Performance Metrics
• Advanced Monitoring Tools
• Tailored Reporting
• Building positive supplier relationships
• Risk Mapping and Analysis
• Audit Inspection, Training, Oversight and Certification
• Multi-lingual capability

Learn more here.

Reporting and Verification services will soon be available from SCS as the CBAM regulations and reporting infrastructure, including the CBAM Transitional Registry, scheduled to be part of the CBAM Competent Authorities Traders Portal, are further developed by the EU Commission. 

While the first CBAM report will be due no later than January 31, 2024 for the preceding quarter, as of this writing, and according to the CBAM Regulation, the following items will need to be reported: 

• The total quantity of each type of product, identified by CN/tariff code, expressed in tonnes
• Country of origin
• The installation where the product was produced (and specifically for steel goods, where known, the identification number for the steel mill where the batch of raw materials originated)
• The production route used for the manufacturing of the product, which reflects the technological option and information on specific parameters qualifying the route chosen and descriptive parameters that affect the embedded emissions of the goods
• Actual total embedded emissions in tonnes of CO2 emitted for each tonne of the goods, which would be calculated according to the method listed in Annex IV of the CBAM Regulation, as further expanded upon in the draft implementing regulation
• The direct embedded emissions following the methods detailed in Annex III of the draft implementing
• For indirect emissions, the declarant must submit, amongst other details, the electricity consumption and the corresponding emissions factor, and
• Carbon price paid abroad

In order to ensure the efficient implementation of reporting obligations, an electronic database will be established by the EU Commission to collect the information reported during the transitional period. This Registry is scheduled to be available by October 1, 2023.

Verification of emissions data for products subject to the CBAM Regulation will not be required until the full implementation of the regulation starts in 2026. Further details will be forthcoming.