EU’s Update on CBAM FAQ: How to Obtain Emissions Data from Your Suppliers
In a recent move to adapt to current transparency requirements for emissions, the European Union has updated the Frequently Asked Questions (FAQ) regarding the Carbon Border Adjustment Mechanism (CBAM). This update focuses particularly on how companies should obtain emissions data from suppliers of CBAM goods. This change reflects the EU’s commitment to ensuring accurate emissions accounting and preventing potential loopholes in carbon emissions reporting. In this article, we will explore the main aspects of this update and how companies can align with the new requirements.
Declarant Obligations
One of the key points in the updated CBAM FAQ is that reporting declarants must make every possible effort to obtain actual emissions data from the suppliers or producers of CBAM goods. This means that when companies are responsible for reporting carbon emissions, they must ensure that the information received is as accurate as possible. In cases where declarants fail to obtain this data, they are required to demonstrate that they have made all reasonable efforts to collect it.
Reporting Procedure and Justification of Efforts
If a declarant fails to obtain the necessary data on actual emissions, it must use the “comments” box in the Transitional CBAM Registry to provide appropriate justifications. Additionally, declarants must include supporting documents that attest to the unsuccessful efforts and steps taken to obtain data from suppliers or producers. This allows authorities to assess whether all reasonable efforts have been made to comply with reporting obligations.
Role of National Control Authorities (NCA)
National Control Authorities (NCA) are responsible for assessing whether reporting declarants have met all the necessary requirements to submit complete and accurate CBAM reports. In this context, well-justified difficulties in obtaining the required emissions data from the producers of CBAM goods can be considered. NCAs will analyze how declarants have approached the challenges encountered and will evaluate whether the efforts made are adequate and proportional to the economic size of the declarant and the total volume of CBAM goods imports and their embedded emissions.
Assessment of Penalties
In deciding on penalties, NCAs may consider the means and resources that declarants have effectively allocated to the unsuccessful efforts of data collection, including the adequacy of these means and resources in relation to the declarant’s economic size and total imports of CBAM goods. NCAs may also examine the repetition of these actions and follow-up with producers or suppliers from third countries, the time involved, and its duration.
Importance of Demonstrating Efforts
Declarants must always demonstrate that they have made all efforts that can reasonably be expected of them to obtain the necessary data on embedded emissions, considering their internal operational capabilities and the ability of operators to determine actual emissions. This involves not only data collection but also a proactive approach in managing supplier relationships and addressing any issues that may arise in the reporting process.
Ensuring an Efficient Tracking System
To ensure compliance with these requirements and build a solid audit trail in supplier engagement, companies may opt for solutions like ABX 2.0, which are designed to assist in monitoring and reporting emissions. This system can support companies in meeting CBAM requirements and ensuring the necessary transparency in carbon emissions reporting.
Conclusion
The update to the CBAM FAQ reflects the European Union’s commitment to ensuring accurate emissions accounting and preventing potential evasion. Companies must be prepared to make all necessary efforts to obtain precise emissions data from suppliers and be able to justify any difficulties encountered in this process. By implementing effective solutions and proactively managing supplier relationships, companies can more easily navigate this complex reporting framework and contribute to the EU’s global sustainability goals.