The EU’s Carbon Border Adjustment Mechanism (CBAM) entered its pilot phase in October 2023, marking a transformative shift in the bloc’s climate and trade policy. Designed to complement the EU Emissions Trading System (ETS), CBAM aims to prevent carbon leakage by requiring importers of certain carbon-intensive goods to report embedded greenhouse gas emissions and, ultimately, purchase CBAM certificates that reflect these emissions. The initial pilot phase applies to key sectors including steel, cement, aluminum, fertilizers, and electricity. Although no financial adjustments are imposed during the pilot, the reporting obligations are extensive, setting the stage for the full implementation of CBAM charges starting in 2026. This article examines the key data transparency requirements of the CBAM pilot phase, provides guidance for EU importers on leveraging open datasets such as the EU-trade database (EUTD) and ETS registries, and offers practical steps for integrating CBAM certificate reporting into enterprise resource planning (ERP) systems.
Under the CBAM pilot phase, importers of covered goods must submit quarterly reports detailing the direct and indirect emissions associated with the production of their imported materials. This includes not only emissions generated within the manufacturing facility but also upstream emissions from energy consumption and raw material inputs. Importers are encouraged to collect primary data from foreign producers, but in cases where such data is unavailable, the European Commission has provided default values based on international benchmarks. The transparency objective of the CBAM pilot is to familiarize importers and foreign producers with the reporting process while enabling the EU to refine its emissions calculation methodologies and enforcement mechanisms before financial charges come into force.
EU importers can enhance the accuracy of their CBAM reports by combining internal procurement data with publicly available datasets. The EU-trade database (EUTD) provides detailed statistics on the volume, value, and origin of imports, which can be cross-referenced against supplier declarations to verify consistency. For sectors already participating in the ETS, such as EU-based aluminum or cement producers, importers can consult ETS registries to understand the typical emissions profiles of comparable EU installations. This data serves as a useful reference point when evaluating the credibility of emissions information provided by foreign suppliers or when determining which default values to apply. Importers should also monitor updates from the European Commission regarding sector-specific guidance, as these materials provide clarifications on acceptable data sources, emissions factors, and calculation methodologies.
Integrating CBAM certificate requirements into existing import ERP systems is critical for streamlining compliance. The first step is to map the CBAM reporting obligations to existing customs and procurement workflows. Importers should identify which tariff codes correspond to CBAM-covered goods and ensure that purchase orders, invoices, and customs declarations capture the necessary emissions data fields. ERP systems can be configured to prompt procurement teams to collect emissions declarations from suppliers at the time of order placement, reducing the risk of non-compliant shipments. Where default values are used, these should be linked to the relevant product and supplier profiles within the ERP system to ensure consistent application across transactions.
A key element of CBAM readiness is the development of internal tools or modules within ERP platforms that calculate the number of CBAM certificates required for each shipment. This requires integrating emissions data with import volumes and applying the calculation formulae specified by the European Commission. Some ERP providers now offer CBAM compliance modules or plugins that automate this process and generate the necessary reports for submission to national CBAM authorities. Importers should prioritize system testing during the pilot phase to identify data gaps, processing errors, or workflow inefficiencies. Early identification and resolution of these issues will be vital to managing the administrative and financial impacts of CBAM once the charging phase begins.
Beyond system integration, importers must establish clear governance structures for CBAM compliance. This includes assigning responsibilities for data collection, verification, reporting, and submission of CBAM declarations. Senior management oversight is essential to ensure that CBAM obligations are treated as a core component of the company’s climate and trade strategy, not merely as a regulatory burden. Internal audit teams should conduct periodic reviews of CBAM reporting processes to identify risks and opportunities for improvement. Documentation of these controls will provide assurance to regulators and stakeholders that the company is taking its obligations seriously.
The pilot phase of the CBAM provides a valuable opportunity for EU importers to build robust, transparent supply-chain emissions reporting systems. By leveraging tools such as the EUTD and ETS registries, companies can enhance data integrity and position themselves as leaders in climate-responsible trade. Importers that invest in ERP system integration and governance during this period will not only ensure compliance but also gain insights that support broader decarbonization efforts. As the transition from pilot to charging phase approaches, the ability to produce accurate, auditable emissions data will become a key differentiator in global supply chains increasingly shaped by carbon accountability.