CBAM: Our Reporting Approach

Carbon Border Adjustment Mechanism (CBAM) is an EU policy to monitor and reduce the carbon emissions associated with the products that are exported to the European Union. The policy aims to contribute to achieving the climate goals set by the EU under the Paris Agreement.

It covers 6 sectors namely Iron & Steel, Aluminum, Cement, Fertilizers, Hydrogen and Electricity. **Phases of implementation — **CBAM Compliance has 2 phases of implementation i.e. transitional phase (2023–2025) and Full Implementation Phase (2026 Onwards)

Currently, the policy is in its transitional phase, requiring only emissions reporting.

However, starting 1st January 2026, carbon taxes will be levied on importers based on the emissions embedded in their imported goods.

To ensure accuracy and compliance with EU regulations, we follow four step approach for CBAM Reporting Including Process Mapping, Identifying the Data points, Data Collection, Validation & Analysis and Final CBAM Report Preparation.

**1. Process Mapping: **Understanding the processes, machineries and fuels used for the production of CBAM goods

2. Identifying the Data points (as per the CBAM reporting requirements)

• Product Data: Quantity of CBAM goods exported along with their CN codes
• Precursor Data: Type, Quantity & Sources of raw materials used for CBAM goods
• Fuel Data: Type & Quantity of Fuels and Electricity consumed

3. Data Collection, Validation and Analysis

The data is collected, validated and analyzed for the calculation of emissions.

4. CBAM Report Preparation & Query Resolution

The report is prepared as per the CBAM communication template and subsequent queries are resolved.

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Contributed by-

Prajwal Tupe, Business Development Associate and

Aniruddha Pandav, Lead Consultant

Social Lab