EU CBAM: 10 Common Misconceptions Manufacturers Should Avoid

The End of the EU CBAM Transitional Period

The transitional period of the EU Carbon Border Adjustment Mechanism (CBAM) is nearing its end, giving way to the definitive phase, which is expected to begin on 1 January 2026.

This transitional phase has served as a learning period for the multiple stakeholders involved. However, it has also been the source of various misconceptions about the mechanism, among both importers and manufacturers located outside the EU (hereafter referred to simply as manufacturers).

For manufacturers, the transitional phase introduced new data requests. For many, CBAM only came onto their radar after they received data requests from their clients, who don’t always need to be located within EU borders to demand this data. Although the Commission made efforts to educate manufacturers on the rules for calculating their CBAM emissions, several key challenges prevented actual data from being used by CBAM declarants: the lack of familiarity with EU law, insufficient knowledge of carbon accounting, difficulty gathering data from upstream suppliers, and concerns around supplier confidentiality, especially among traders and distributors. Additionally, regulatory changes under the Omnibus package and the confusion created among EU importers further compounded these challenges.

Unlike EU importers, manufacturers do not face penalties for non-compliance. However, they risk losing EU market share if their EU clients cannot obtain the necessary emissions data to fulfill their CBAM obligations and have to rely on more costly default values.

This blog post aims to clarify ten common misconceptions to help manufacturers avoid costly mistakes and maintain their competitive position in the EU market.

1. I have to use the CBAM Communication Template

Reality: The Communication Template is optional

Many manufacturers believe they must use the CBAM communication template provided by the European Commission to calculate and report their emissions data. However, not understanding how to use the template might prevent them from sharing data altogether. While this template can be helpful as a standardized format, manufacturers are free to share the required emissions data in any format they choose, as long as it contains all the necessary information specified in the CBAM regulation and the emissions and additional parameters are monitored following the EU CBAM methodology.

The key is ensuring your data submission includes all required elements. Whether manufacturers use the Commission’s template, their own Excel spreadsheet, or a specialized software provider like Carbon Glance is entirely up to them.

2. I need to report my data quarterly

Reality: The default reporting period is the calendar year

This misconception often stems from the quarterly reporting requirements that apply to EU importers during the transitional phase. However, manufacturers are not bound by these quarterly cycles. The default approach for manufacturers is to provide emissions data on an annual basis, covering the (European) calendar year.

The reason why twelve months is the default reporting period for manufacturers is because a full year allows them to gather data that accurately reflects the annual operations of their manufacturing plants, including any disruptions from planned shutdowns (e.g., for maintenance) and start-ups. A full year also helps mitigate data gaps, such as by taking meter readings before and after any missing periodic data points.

That said, manufacturers can choose to provide data for shorter periods if it better aligns with their fiscal cycles provided that they cover at least 3 months.

3. If I export less than 50 tonnes, I don't need to comply with CBAM

Reality: The new de-minimis 50-tonne threshold only applies to EU importers, not manufacturers

The new mass-based threshold of 50 tonnes introduced with the Omnibus package only applies to importers. An EU importer who imports more than 50 tonnes of CBAM products within a year will need to comply with CBAM obligations. This is not the case for manufacturers, since the new threshold does not exempt manufacturers from providing data when requested by their EU clients, regardless of the volume being exported.

Therefore, manufacturers should be prepared to provide emissions data regardless of their individual export volumes to any particular client.

4. I can use GHG Protocol or ISO standards for my emissions calculations

Reality: CBAM has specific calculation methodologies that may differ from other standards

While the GHG Protocol and ISO 14064 are well-established carbon accounting standards, CBAM has its own specific calculation requirements that don’t always align with these frameworks. This is due to the fact that the scope of CBAM is determined following the EU ETS monitoring, reporting, and verification (MRV) rules.

Importantly, CBAM covers a narrower scope of emissions than typical product carbon footprints. The regulation excludes downstream emissions from product use and end-of-life disposal, transport emissions between production sites, and emissions from processes further upstream in the supply chain. This more limited scope reflects the boundaries used in the EU ETS system.

The CBAM calculation methodology follows a specific top-down approach. First, manufacturers start with calculating the total emissions of their manufacturing plant. The total emissions are then allocated to individual production processes within that facility. Next, any embedded emissions from relevant precursor materials (other CBAM products) used in production are added to the emissions. Finally, this combined total is divided by the quantity produced at each production process to arrive at emissions per unit of product.

Manufacturers should familiarize themselves with the CBAM-specific methodology outlined in the implementing regulation, rather than assuming their existing carbon accounting practices will automatically comply.

5. I need to have my data verified by a third party

Reality: Data verification is not required for manufacturers during the transitional period

While having data verified during the transitional phase may help improve data quality and prepare for the next phase of CBAM, verification will not be mandatory until the start of the definitive regime in January 2026. Consequently, using non-verified data is fully permitted during the transitional phase. Furthermore, CBAM verifiers for the definitive phase will need to be formally accredited according to specific requirements, which are yet to be published in a delegated act.

6. I cannot use default values for my calculations

Reality: Default values may be used up to a certain limit

EU importers were initially allowed to report using exclusively default values until their third CBAM report (July 2024), after which they had to start using actual data for the remainder of the transitional phase. The use of default values is, however, still permitted, but only when such values do not exceed 20% of the product's total embedded emissions.

For manufacturers, this means that if they produce a complex CBAM product and need to collect CBAM emissions data from suppliers, relying on default values won’t be possible if the precursor materials from the suppliers contribute more than 20% of their product’s emissions, either in aggregate or individually. In that case, the manufacturer will need to collect actual data to stay below the threshold.

7. I have to upload my data to the EU's portal for third-country operators

Reality: The use of the portal for operators of third-country installations (O3CI) is optional

In January 2025, the Commission opened a new portal section of the CBAM Registry. This section allows installation operators outside the EU to upload and share their installations and emissions data with reporting declarants in a streamlined manner, instead of submitting it to each declarant separately. Importantly, this portal does not include functionality to perform CBAM calculations.

As with the CBAM communication template, use of this resource is optional. Some manufacturers may instead choose to share their CBAM data directly with clients via email or software solutions like Carbon Glance. This is a business decision, not a regulatory requirement.

8. I need to disclose confidential supply chain information

Reality: Confidential business information can remain protected

While manufacturers are required to provide emissions data, they may choose to keep sensitive commercial information confidential. This is particularly important for traders and distributors who wish to avoid disclosing details about their suppliers. For example, the O3CI allows manufacturers to decide which information is made accessible to the public, with options to hide the operator’s name, address, contact details, and the installation’s name and location.

However, a gap remains for the Commission to address how such confidentiality concerns should be managed outside the portal. In practice, manufacturers have often refrained from disclosing this information when sharing CBAM data with clients. In addition, when confidentiality concerns arise, manufacturers are encouraged to discuss them directly with their EU clients to identify suitable solutions.

9. I need to calculate emissions for each product separately

Reality: Emissions can be calculated for multiple products

To make monitoring easier, the EU CBAM regulation groups all CBAM goods, identified by their combined nomenclature (CN) code, into “aggregated goods categories”. With some exceptions, each aggregated goods category corresponds to a single production process within a plant. As a result, when a plant’s total emissions are allocated to its production processes, those emissions are distributed across all goods within the corresponding aggregated category. Consequently, the specific embedded emissions attributed to each product in that process are identical for all goods produced within it.

Manufacturers may choose to provide more granular calculations by splitting goods within the same aggregated goods category into separate production processes. However, this approach is voluntary.

10. I need to purchase CBAM certificates or pay penalties

Reality: Manufacturers do not pay CBAM certificates or penalties

Manufacturers are not required to purchase CBAM certificates or pay penalties for non-compliance with EU CBAM obligations.

CBAM compliance and financial obligations rest entirely with EU importers—i.e., the CBAM declarants—who will be obliged to purchase and surrender certificates corresponding to the embedded emissions of their imported goods.

The role of manufacturers is limited to providing accurate emissions data and, starting in 2026, ensuring that this data is verified by an accredited third party.

The main impact of CBAM on manufacturers is commercial, as EU clients will begin factoring CBAM-related costs into their purchasing decisions and contract negotiations.

Looking Ahead: Preparing for the Definitive Phase

As the transitional period draws to a close, manufacturers should focus on establishing robust data collection and reporting systems. While requirements during the transitional phase have been relatively flexible, the definitive phase starting in 2026 will introduce stricter obligations, particularly regarding the quality of the data submitted.

By understanding and addressing the common misconceptions that arose during the transitional phase, manufacturers can better position themselves to support their clients’ CBAM compliance efforts and strengthen their presence in the EU market as reliable suppliers of CBAM data.

Looking for a CBAM Solutions Provider?

At Carbon Glance, we specialise in helping importers and manufacturers successfully navigate CBAM, providing comprehensive digital solutions to tackle all your CBAM challenges.

Our factory-level carbon accounting tool is fully aligned with the EU CBAM methodology, enabling manufacturers to maintain complete control over CBAM compliance while building trust with their clients.