CBAM Reporting

CBAM, or the Carbon Border Adjustment Mechanism, is a mechanism under which “taxes” are levied on imported carbon-intensive products when goods and services are imported into the European Union.

HPBS calculates greenhouse gas emissions in accordance with CBAM requirements:

• Diagnostic audit: analysis of the company’s production chains; identification of greenhouse gas emission sources subject to CBAM requirements; analysis of technological regulations and accounting data; assessment of existing data-collection and control processes and, where necessary, measurement systems; preparation of a list of nonconformities and risks;

• Definition of calculation boundaries for CBAM purposes; development and updating of production-process and technological-route diagrams; identification of incoming and outgoing material and energy flows: fuel, raw materials, precursors, waste, steam, heat, electricity and products. Definition of mechanisms for monitoring and controlling instruments used to account for measurable technological greenhouse gas emissions. Establishment of rules for allocating greenhouse gas emissions among different product types and development of a register of greenhouse gas sources and sinks in technological processes.

• Development of a data-management and calculation methodology for a specific product type, taking the client’s data into account; identification of data sources, calculation factors and data-use rules; risk control and assessment; and assessment of calculation uncertainty in accordance with ISO 14064-1.

• Development and implementation of a digital MRV platform in business processes to automate data collection, calculations and verification, taking into account methodological requirements and procedures for collecting, checking, approving, storing, archiving and correcting data, with the ability to integrate subsequently with ERP, 1C, MES and other enterprise information systems.

• Calculation of direct and indirect energy-related greenhouse gas emissions for producers under CBAM, GHG Protocol and ISO 14064 methodologies, and development of calculation models.

• Training employees in data collection and greenhouse gas emissions calculation.

• Preparation of CBAM-compliant reporting for submission by product importers in the EU;

• Development of a strategy to reduce greenhouse gas emissions from product manufacturing in order to lower its carbon intensity;

• Calculation of the cross-border carbon tax, taking into account current EU ETS carbon-unit prices and compensation paid in the product’s country of manufacture;

• Consulting on registration and management of the Operator account

• Support for the reporting-verification stage, including provision of an opinion on the reporting documentation’s compliance with CBAM requirements.

What does calculating emissions under CBAM requirements provide to product manufacturers?

• Compliance with CBAM requirements enables product manufacturers and suppliers to retain access to the EU market covered by CBAM. This is important for export-dependent companies and can contribute to their long-term resilience.

• Product suppliers that do not adapt to new environmental requirements and reduce their carbon emissions may face additional taxes and fees, increasing their operating expenses. Calculating emissions under CBAM requirements enables suppliers to see the risks of additional climate-related taxes and develop solutions to reduce them in good time.

• CBAM helps ensure compliance with international greenhouse gas standards. For many companies, especially those exporting their products, compliance with these standards is becoming an increasingly important requirement, particularly as investors, customers and partners show growing interest in environmental sustainability.

• CBAM promotes green trade and encourages consumers to choose environmentally sound goods. Suppliers offering products with low carbon emissions gain a competitive advantage in the global market and can increase their sales volumes.

• CBAM creates financial incentives for suppliers to reduce greenhouse gas emissions in the manufacture of their products. This enables companies not only to comply with CBAM requirements, but also to reduce their carbon footprint, which may save them money in the future.

Which companies are subject to CBAM requirements?

During the transitional period, CBAM greenhouse gas emissions calculations must be performed by manufacturers in the six most carbon-intensive product categories: iron and steel, cement, aluminum, fertilizers, electricity and hydrogen.

For each of these categories, the importer purchasing the product must provide data on direct and indirect energy-related greenhouse gas emissions associated with manufacturing the product (embedded emissions). Requirements for the content of importers’ reports, as well as recommendations for calculating emissions for each product category, are presented in EU Commission Implementing Regulation 2023/1773

The CBAM mechanism supports the reduction of greenhouse gas emissions in product manufacturing and creates more equal competition between companies manufacturing products in countries with strict carbon regulations and those in countries where such regulations do not yet exist. CBAM is based on the idea that goods produced outside the EU and associated with high carbon emissions should be subject to additional taxes when imported into the EU.

Contact us: info@hpbs.uz

Additionally:

• TALCO Project — Tajik Aluminium Company

• What is CBAM?

• The cement industry, CBAM calculation and the decarbonization process.