Starting from 1 October 2023, importers must report greenhouse gas (GHG) emissions from the production of certain imported goods through quarterly CBAM reports to the European Commission, covering carbon dioxide, nitrous oxide, and perfluorocarbons. Compliance involves becoming an authorized CBAM declarant, gathering emissions data from suppliers, calculating emissions using primary data or default values, preparing the CBAM report, and cooperating with customs authorities during corrections. Deloitte offers comprehensive support in setting up data gathering structures, performing calculations, preparing reports, and ensuring continuous monitoring and compliance through its multidisciplinary model, expertise in European regulations, and partnerships with big data software providers.

Conducting an internal impact assessment is crucial for businesses to turn the challenges of the Carbon Border Adjustment Mechanism (CBAM) into a competitive advantage. CBAM aims to prevent carbon leakage by imposing a carbon levy on imports of products like cement, iron & steel, hydrogen, aluminum, fertilizers, and electricity from third countries. From 1 October 2023 to 31 December 2025, EU businesses must report embedded emissions quarterly, transitioning to yearly declarations and CBAM certificate purchases from 1 January 2026. Companies must assess which products are covered, their sourcing origins, import volumes, existing carbon levies, available carbon data, responsible departments, and financial exposure to CBAM levies. Deloitte offers support through identifying imports, advising on sourcing patterns, collecting carbon data, conducting transformation reviews, applying for 'Authorized Declarant' status, and monitoring policy developments, leveraging expertise in global trade, policy studies, and data analysis.

With the Carbon Border Adjustment Mechanism (CBAM) approaching, industries with long project-investment cycles must urgently rethink their greenhouse gas (GHG) reduction and commercial strategies to prepare for a low-carbon future. As CBAM levies will impact financial costs for importers and downstream manufacturers, businesses must reduce scope 3 upstream emissions and develop a comprehensive GHG reduction strategy. This involves engaging with stakeholders, optimizing business activities, and monetizing low-carbon products through price differentiation. Additionally, securing green financing and tailoring investment criteria to the net-zero transition can enhance competitiveness and attract clients focused on sustainability. Deloitte offers expertise in developing GHG reduction strategies, end-to-end support from roadmap development to execution, sustainable product offerings, and navigating the climate and energy transition, leveraging insights from successful projects across various industries.

As the Carbon Border Adjustment Mechanism (CBAM) comes into effect, businesses must reassess their risk and procurement strategies to ensure they remain accurate. This involves mapping the carbon intensity of current suppliers, evaluating their ability to report emissions timely and accurately, and benchmarking their performance against industry standards. Companies should optimize their supplier landscape by consolidating suppliers, negotiating costs, improving efficiency, increasing flexibility, fostering innovation, and mitigating risks. Deloitte offers support through assessing current supplier policies, implementing unified third-party risk tools, updating supplier lifecycle processes, and helping set GHG reduction targets. Our expertise has helped organizations in metals & mining and industrial sectors to future-proof their sourcing frameworks and develop comprehensive third-party risk management systems.