Understanding verification requirements under the EU’s Carbon Border Adjustment Mechanism (CBAM) is crucial for both exporters and importers. These requirements differ significantly between the transitional period (2023-2025) and the definitive period (from 2026), with distinct obligations for each party.
Understanding the Timeline
The EU has designed CBAM implementation in two distinct phases to allow businesses to adapt gradually. The transitional period focuses on establishing proper monitoring and reporting systems, while the definitive period introduces financial obligations and stricter verification requirements.
Exporter Verification Requirements
During the transitional period through 2025, exporters face relatively flexible verification requirements. While verification isn’t mandatory, the European Commission strongly encourages voluntary verification to prepare for future requirements. The focus during this period should be on developing robust monitoring methodology documentation.
From 2026, verification becomes mandatory for exporters. This includes engaging accredited verifiers to assess monitoring methodologies, data collection processes, and emissions calculations. The verifiers will issue formal reports confirming the accuracy of reported embedded emissions, which become essential documents for trade with the EU.
Importer Verification Responsibilities
Importers face different verification requirements during the transitional period. Their primary responsibility involves submitting quarterly CBAM reports based on data received from exporters. While they don’t need to verify the emissions data themselves, they must ensure accurate and timely reporting of the information they receive.
The definitive period brings additional responsibilities for importers. They must submit annual CBAM declarations that include verified emissions data from their exporters. These declarations must be accompanied by verification reports from accredited verifiers, confirming the accuracy of the embedded emissions calculations.
Key Differences in Roles
The verification framework creates distinct roles for exporters and importers. Exporters take a proactive role, responsible for monitoring, calculating, and verifying their emissions data. Importers, on the other hand, play a more reactive role, relying on verified data from their suppliers while ensuring proper submission of required documentation to EU authorities.
Documentation Requirements
Exporters must maintain comprehensive records to support their emissions calculations, including:
- Detailed fuel and material consumption records
- Production output data
- Laboratory analysis results
- Evidence of any carbon pricing paid in their country
Importers need to maintain records of:
- CBAM declarations and reports
- Verification reports from exporters
- Documentation of any carbon price payments in exporting countries
- Records of CBAM certificates purchased and surrendered
Financial Implications
While exporters bear the cost of verification processes, importers face the financial responsibility of purchasing CBAM certificates. The accuracy of verified emissions data directly impacts the number of certificates importers must purchase, making the verification process crucial for both parties’ financial planning.
Preparing for Success
Both exporters and importers should start preparing now for the verification requirements that become mandatory in 2026. This includes:
For exporters: Establishing robust monitoring systems, developing comprehensive documentation procedures, and building relationships with accredited verifiers.
For importers: Creating systems to track and manage verification reports from suppliers, ensuring proper documentation for carbon price deductions, and maintaining clear communication channels with exporters.
Expert Support for Your Verification Needs
At CMetrics, we understand the complexities of CBAM verification requirements and their impact on your business operations. Our team specializes in helping both exporters and importers establish efficient systems for emissions monitoring, verification, and reporting.
Ready to ensure your business meets CBAM verification requirements? Contact me at isco@c-metrics.com or book a call to discuss your specific needs. Let CMetrics help you navigate these complex requirements and turn CBAM compliance into a competitive advantage.
