EU Carbon Border Adjustment Mechanism creates compliance challenges for global trade

The European Union’s Carbon Border Adjustment Mechanism (CBAM) is creating significant administrative and technical challenges for international exporters and importers. As the financial phase of the mechanism approaches in 2026, companies will be required to collect, report, and officially verify precise emissions data from their international suppliers.

In the Netherlands, the government has noted growing concerns among importers regarding the capacity to verify emissions data. Experts warn that a shortage of qualified verifiers could create a critical bottleneck. If importers fail to provide specific emissions values, they may be forced to use default values, which are typically set conservatively high and could lead to increased costs.

In India, the Department of Commerce, in collaboration with the National Accreditation Board for Certification Bodies (NABCB) and the Engineering Export Promotion Council (EEPC), held an awareness session in New Delhi. The session aimed to prepare Indian exporters for evolving regulatory requirements, focusing on technical aspects such as calculating embedded emissions and understanding reporting obligations, particularly within the iron, steel, and aluminum sectors.