BusinessEurope’s October review highlights the operational challenges facing companies as the EU’s carbon border system moves towards its first certificate obligations.
From climate policy to operational compliance
The European Union’s Carbon Border Adjustment Mechanism (CBAM) is entering a phase in which its effectiveness will depend increasingly on companies’ ability to collect, verify and reconcile emissions data across international supply chains. In its fact check issued on 28 October 2026, BusinessEurope examined the practical challenges of implementing a system intended to address carbon leakage while maintaining industrial competitiveness.
BusinessEurope supports CBAM’s climate and competitiveness objectives but has raised questions about the proportionality and consistency of its implementation. Importers must establish which customs codes fall within the mechanism’s scope, identify the responsible declarant, obtain usable emissions information and reconcile reported data with the quantities of goods entering the EU.
Weaknesses in any of these processes can generate additional compliance costs, even before companies begin purchasing CBAM certificates.
The 2027 deadlines place pressure on current data collection
The definitive CBAM regime entered into force on 1 January 2026. Certificate sales are scheduled to begin in February 2027, while the first annual declarations and corresponding surrender obligations for goods imported during 2026 are due by 30 September 2027.
This timetable creates a gap between the commercial transactions that generate future CBAM liabilities and the settlement of those obligations. Although certificate payments will follow later, companies must collect and maintain reliable records during the current reporting period to substantiate their emissions calculations.
Customs declarations identify imported goods and their quantities but do not independently establish the embedded emissions associated with their production. Obtaining the necessary information can require manufacturing-process records, energy consumption data, clearly defined product boundaries, precursor information and verification by an accredited body.
Large industrial groups can distribute these responsibilities across specialised compliance teams. Smaller importers may rely on foreign suppliers whose existing monitoring systems were not designed to satisfy European verification requirements.
Steel, aluminium and cement face different administrative burdens
The workload associated with CBAM compliance varies considerably across covered industries. Cement producers may deal with a relatively limited number of production facilities and product families, whereas steel distributors can manage numerous grades, dimensions and customs entries.
Aluminium supply chains introduce additional distinctions between primary and secondary production routes. Consequently, identical reporting requirements can generate substantially different administrative workloads depending on a company’s operating model.
BusinessEurope’s assessment points to the importance of considering these differences when developing regulatory guidance. Implementation requirements need to be tested against a range of industrial and trading structures rather than primarily against large, vertically integrated producers.
The number of declarations submitted will also provide only a limited measure of implementation quality. A company may meet a filing deadline while relying on inconsistent quantities, outdated supplier documentation or inadequately supported emission factors.
More informative indicators would include the frequency of material corrections, the proportion of emissions claims supported by appropriate verification and the capacity of competent authorities to investigate and resolve discrepancies. Evidence from the first compliance cycle could help regulators and business associations identify where targeted adjustments are necessary.
Supplier data quality influences carbon costs
Access to reliable emissions information is not distributed equally among importers. Companies with several qualified suppliers may be able to introduce standardised reporting templates and contractual warranties governing the quality of the information received.
Smaller manufacturers that depend on a single overseas producer may have less negotiating power. Where suppliers cannot provide complete and verifiable data, importers may have to use applicable default values or consider changing their sourcing arrangements.
The availability of emissions data alone is therefore insufficient. Information must also withstand assessment by a verifier and potential subsequent scrutiny by the relevant competent authority.
This distinction affects both the credibility of reported emissions and the commercial position of importers. Where actual production data cannot be adequately substantiated, the resulting compliance calculation may not reflect the producer’s real emissions performance.
The 50-tonne threshold does not remove wider implementation challenges
The EU has introduced a mass-based threshold of 50 tonnes for relevant goods, substantially reducing the number of small-volume importers subject to CBAM obligations. Electricity and hydrogen are subject to separate treatment.
However, the exemption of smaller importers does not resolve the administrative challenges faced by larger businesses managing hundreds of customs codes or sourcing products from multiple installations.
Improved digital interfaces, clearer definitions of responsibilities and better coordination of customs enforcement remain important elements of effective implementation. These measures would address operational difficulties without necessarily changing the mechanism’s underlying carbon requirements.
Regulatory simplification must preserve emissions integrity
The central implementation challenge is to reduce unnecessary administrative work without weakening the carbon signal that CBAM is designed to deliver.
Poorly designed exemptions or relaxed evidence requirements could create opportunities for suppliers to obscure emissions information or shift production towards products outside the mechanism’s scope. Conversely, excessive administrative complexity could disadvantage efficient producers whose data-management systems are not yet sufficiently developed.
Potential improvements would therefore need to clarify documentation and verification requirements, introduce proportionate risk controls and retain scrutiny where emissions claims materially affect the number of certificates that must be surrendered.
For company directors, CBAM compliance increasingly extends beyond sustainability reporting into procurement, finance, information technology and customs management. Companies need to establish clear accountability for the declarant role, maintain supplier-by-supplier inventories of emissions data, document the review of reported figures and define escalation procedures for suppliers that fail to provide the required information.
BusinessEurope’s 28 October review places these operational questions at the centre of the debate as the EU approaches the first certificate-related obligations for 2026 imports.
