The EU’s Carbon Border Adjustment Mechanism (CBAM) is a landmark policy designed to prevent carbon leakage, when companies move production to countries with weaker environmental regulations and import carbon-intensive goods back into the EU, avoiding local carbon costs.
CBAM introduces a levy on imported goods based on their embedded greenhouse gas emissions. The goal? To create a level playing field between EU-based and non-EU manufacturers.
As the world’s first regulation of its kind, CBAM marks a major shift in global trade and climate accountability. From January 2026, it enters its definitive phase, turning today’s reporting obligations into real financial consequences. From that point on, accurate emissions data won’t just be useful, it will be essential to avoid inflated compliance costs.
From default values to primary data
During the transitional phase (Oct 2023–Dec 2025), companies can report emissions using default carbon factors provided by the European Commission. But since August 2024, they must show that they’ve made reasonable efforts to obtain primary data first.
These default values are intentionally conservative, often reflecting worst-case scenarios. As a result, relying on them can lead to significantly higher levies than if primary data were used.
Yet, many businesses we work with still default to defaults, largely because gathering emissions data from complex, global supply chains is incredibly challenging.
Why primary data is so hard to get
Global supply chains often stretch across multiple jurisdictions, some of which lack carbon monitoring frameworks. Many manufacturers:
- Don’t collect emissions data
- Don’t see the value in doing so, or
- Don’t have the technical capacity to calculate embedded emissions
This misalignment between EU regulatory expectations and supplier capabilities is emerging as one of CBAM’s biggest implementation hurdles.
Adding to the challenge, the cost of inaction is passed down the chain. A supplier’s failure to report doesn’t make the emissions vanish, it raises costs for the importer under CBAM.
As a result, we’re seeing a sharp increase in:
- Pressure on suppliers to collect primary data
- Strained commercial relationships
- Businesses considering switching to more transparent supply partners
A collaborative approach to CBAM compliance
While CBAM aims to drive cleaner global production, the short-term burden can be eased by working together. Businesses are encouraged to:
- Open lines of communication with suppliers early
- Share the costs and resources required for emissions tracking
- Set clear expectations around data standards
- Offer guidance or tools where possible
Building a mutually beneficial compliance strategy can reduce costs, preserve relationships, and enhance long-term supply chain resilience.
How can Valpak help?
Valpak’s CBAM Compliance service has been designed to guide you through the regulation’s demands, without the overwhelm. We’ve helped thousands of businesses comply with environmental legislation since 1997, and with a 100% compliance record, we’re ready to help you navigate CBAM with confidence.
Our expert service includes:
- Supplier risk mapping: Identify which of your suppliers pose the highest data and cost risk
- Primary data collection tools: Templates and systems to help suppliers capture and report accurate emissions
- End-to-end submission management: We’ll prepare and file your CBAM reports for you
- Training and ongoing compliance support: So your team understands both strategy and detail
Contact us on 03450 682 572 or fill out our online enquiry form to find out how Valpak can support your CBAM strategy.
