Five challenges manufacturers face when preparing for CBAM

The Carbon Border Adjustment Mechanism (CBAM) is changing the way manufacturers collect, manage and report carbon emissions. While the regulation provides a clear reporting framework, implementation often proves more complex than initially expected.

Many organisations discover that the greatest challenges are not related to the regulation itself, but to the quality of their carbon data, internal processes and supplier collaboration. Based on experience from early implementation projects, several challenges consistently emerge across manufacturers preparing for CBAM.

1. Obtaining reliable emissions data from suppliers

For many manufacturers, the first challenge begins outside their own organisation.

Calculating product-level emissions requires reliable information from suppliers throughout the value chain. However, suppliers often operate with different reporting methodologies, varying levels of carbon accounting maturity and inconsistent data quality.

Establishing common reporting principles, engaging suppliers early and defining clear data requirements are therefore essential steps towards achieving consistent CBAM reporting.

2. Establishing product-level carbon accounting

Many organisations already report greenhouse gas emissions at corporate level. CBAM introduces a different requirement by focusing on emissions associated with individual products.

Developing product-level carbon accounting requires manufacturers to define system boundaries, identify production processes, allocate emissions consistently and document the methodologies supporting each calculation.

Without a structured accounting framework, maintaining consistency across multiple products and production sites becomes increasingly difficult.

3. Creating governance around carbon data

Carbon reporting cannot be managed by a single department.

Procurement, production, sustainability, finance and IT each contribute information required for compliant reporting. Organisations therefore need clearly defined governance structures that establish ownership, responsibilities and approval processes throughout the reporting cycle.

Strong governance improves both reporting quality and operational efficiency while reducing the risk of inconsistent methodologies across the organisation.

4. Preparing documentation for verification

As reporting requirements continue to mature, the ability to demonstrate how emissions have been calculated becomes increasingly important.

Verification requires more than numerical results. Organisations should be able to document calculation methodologies, allocation principles, activity data, supplier information and the assumptions supporting reported emissions.

Building documentation alongside implementation generally proves significantly more effective than attempting to reconstruct evidence at a later stage.

5. Integrating carbon data into existing systems

Many organisations initially manage carbon data using spreadsheets and manual workflows. While this may support early reporting, increasing reporting requirements often expose limitations in scalability, traceability and data quality.

Integrating carbon accounting into existing ERP systems, production systems and sustainability platforms enables organisations to establish more efficient reporting processes while improving data consistency across business functions.

Digitalisation should therefore be viewed as an important enabler of long-term compliance rather than a separate technology initiative.

Looking Beyond Compliance

Although CBAM has introduced a new regulatory framework, many of the capabilities required for successful implementation extend beyond compliance itself.

Reliable carbon data supports customer transparency, strengthens supplier collaboration and establishes the foundation for future sustainability initiatives, including Product Carbon Footprints (PCF), Environmental Product Declarations (EPDs) and broader ESG reporting.

Organisations that invest in these capabilities today are therefore better positioned to respond to both regulatory developments and evolving market expectations.

How ESP supports manufacturers

ESP supports manufacturers throughout every stage of the CBAM implementation journey. Our advisory services include readiness assessments, implementation planning, carbon data architecture, supplier engagement, methodology reviews, digital transformation and verification readiness.

By combining regulatory expertise with practical implementation experience, we help organisations establish carbon data capabilities that support both regulatory compliance and long-term competitiveness.