Preparing for CBAM Compliance: Strategies for Manufacturers and Exporters in 2025

Map your supply chain & volumes

Identify which of your products are in the CBAM scope (check the CN codes and sector definitions for the goods your company produces or exports). Engage with your EU customer(s) to clarify their total import volumes of CBAM covered goods, and whether your shipments contribute to that threshold. Especially check if they may exceed the 50 tonne volume threshold under the simplifications. Map the full production process: raw materials, intermediate goods, energy inputs — to understand where emissions are embedded. Understand whether you are supplying directly to the EU importer, or via intermediaries, and what data your customer will require for CBAM.

Start collecting / measuring embedded emissions data

Begin collecting actual emissions data (direct and, where relevant, indirect emissions) for your manufacturing installations and processes. According to CBAM methodology: direct emissions are from production processes; indirect emissions may include electricity consumed. During the transitional phase, default emission values can be used temporarily. Note that some indirect emissions (Scope 2, e.g., electricity) will be phased in gradually for certain sectors, so plan to update your data over time. In transitional reporting you may still be able to use default/reference values (especially if you do not yet have full data). Work with your energy/utility team, process engineering, sustainability team (or hire external expertise) to establish data flows, measurement protocols, and documentation. Consider third party verification or assurance of your emissions data — even ahead of the definitive phase — so your EU customer feels confident in your data.

Communicate clearly with EU importers / customers

Since importers will need your data for their reporting, proactively engage with your EU buyer(s) on CBAM: what data they require, what timelines they are working to, what format they want the data in. Negotiate contractual or supply chain clauses: for example, obligations around data provision, audit/verification rights, liabilities for wrong data, responsible party for any cost pass through of CBAM certificate burdens. If your customer is below the threshold (e.g., < 50 tonnes) you may still want to confirm this formally so you understand risk. Use this as an opportunity: if you can demonstrate low embedded emissions compared to competitors, this may become a selling point (differentiator) for your product.

Optimize manufacturing to reduce emissions intensity

Use the lead time (2025) to identify decarbonization opportunities: energy efficiency improvements, switching to lower carbon fuels, sourcing renewable electricity, changes in material mix or process optimization. Lower emissions = lower embedded carbon cost and better competitiveness. Benchmark your emissions intensity against industry peers or EU benchmarks. If you are significantly higher, you may face greater cost burden or risk of losing competitiveness in the EU market. Consider investing in those measures now while you have time — later (post 2026) the cost burden will increase materially.

Build internal governance, data systems & oversight

Assign a CBAM responsible person/team (within operations, sustainability, export/commerce) to oversee data collection, monitor regulation updates, liaise with customers, and track your exposure. Develop an internal emissions data register: for each installation, process step, product line destined for EU, track energy, materials, direct emissions, electricity use, etc. Ensure traceability of data — i.e., you can show for each product batch or production run: what the embedded emissions are, and what assumptions are used. Prepare for verification or audit: document your data sources, measurement protocols, calculation methodology. This will help build trust with customers and mitigate risk of dispute.

Financial planning & risk assessment

Even though the financial liability (certificate purchase) begins in 2026, manufacturers/exporters should estimate potential cost exposure now so they are not caught by surprise. Use available data on likely certificate price (linked to EU ETS allowance price) and your emissions intensity. Scenario plan: What if your embedded emissions remain high? What if your EU customer passes cost through? What if you lose competitiveness? Understand whether you (exporter) or the importer will bear the CBAM cost (or how it will be shared) — negotiate accordingly. If your product is at risk of being deemed high embedded carbon, consider whether you need to accelerate investment in emission reduction, or explore alternate markets less affected by CBAM.

Keep abreast of regulatory updates & extensions

CBAM is still evolving: the EU may expand the scope (to downstream products) or adjust rules for third country carbon pricing and default values. For example, recognition of carbon taxes paid in exporting countries could reduce CBAM cost for importers. Exporters should monitor whether their country’s carbon pricing regime or sectoral policies can help. Continue to monitor legislative changes (e.g., simplification regulations, default value rules, exemption thresholds) so you are not caught unaware. Participate (or encourage your national trade body to participate) in consultations and guidance sessions, to influence and prepare for how procedures will apply to your sector. CBAM regulations are still evolving. The EU may expand the scope to downstream products or adjust rules on indirect emissions, so exporters should monitor updates regularly.

From 1 January 2026, the requirement to purchase and surrender CBAM certificates becomes mandatory. For the first time, the embedded emissions of imported goods will translate into a real financial cost for importers (and indirectly, their exporters).

The price of those certificates will be tied to the weekly average auction price of EU ETS allowances (€/ton CO₂e).

The EU may expand the product scope to include downstream products and look at indirect emissions more comprehensively.

There is growing global interest in CBAM type mechanisms (other jurisdictions may follow) — which means manufacturers/exporters may face similar regimes in other end markets.

For countries with existing carbon pricing systems, exporters may benefit if the carbon price paid in the third country is recognised as a deduction under CBAM rules. Stay aware of your national carbon/regulatory regime.