EU importers preparing declarations under the Carbon Border Adjustment Mechanism (CBAM) may need emissions evidence from production installations beyond their direct contractual suppliers. Where a covered product incorporates materials manufactured several stages upstream, the information required for its emissions calculation may originate outside the final production facility.
The European Commission’s methodology guidance states that actual data for precursors produced at installations other than the final installation must be supported by a report from an accredited verifier covering the relevant production period.
Verification Requirements Extend Beyond Direct Suppliers
This requirement makes CBAM precursor verification dependent on access to records from the installations where the relevant intermediate materials were produced. Requesting emissions information solely from the final exporter may be insufficient if that company cannot independently supply the evidence required for the precursor calculation.
The final exporter therefore needs an effective process for obtaining and transmitting information from its upstream suppliers. The resulting documentation must connect the precursor’s production data with the period relevant to the calculation and the applicable verification report.
For the EU declarant, EU declarant supplier evidence must extend far enough upstream to support the emissions calculation for the imported product. The information provided by the immediate supplier cannot replace the underlying production records required from another installation.
Contractual Arrangements for Upstream Data
Supply agreements can establish the practical arrangements needed to obtain upstream installation data, including access to supporting evidence, reporting periods, correction obligations and cooperation with verification procedures.
Commercial confidentiality may require controlled disclosure arrangements rather than unrestricted circulation of production records. Such arrangements need to allow the relevant information to reach the parties responsible for preparing and verifying the emissions calculation.
The applicable precursor production period is also important because the evidence must correspond to the period covered by the relevant verification report. Records that cannot be linked to the required period may not provide the necessary support for the calculation.
Managing Gaps in the Evidence Chain
Importers and their suppliers also need procedures for handling information that arrives late or cannot be accepted under the applicable rules. These procedures should identify responsibility for obtaining missing records, correcting inconsistencies and escalating unresolved issues before the declaration is prepared.
Effective supply chain emissions reporting therefore depends on cooperation across multiple commercial relationships and production stages. The central purchasing consideration is whether the evidence chain reaches every upstream installation relevant to the calculation. A final supplier’s willingness to cooperate cannot substitute for production records that it does not hold or control.
