Most companies understand the basics of CBAM by now: Track emissions, report them, buy certificates. In practice, however, it’s not that simple.
The challenge sits beneath the headline requirements, showing up as difficulties gathering supplier data, persistent data gaps and confusion over internal ownership. This leads to cost exposure that only becomes visible too late.
Based on what we’re seeing across importers and producers, here are five things companies consistently overlook when preparing for CBAM.
Preparing for compliance, but not for carbon cost strategy
Many companies are focused on getting through CBAM complaince. Fewer are thinking about how to compete under it.
CBAM introduces a new, recurring cost tied directly to emissions. That cost is expected to rise over time. Treating it purely as a compliance obligation misses the bigger opportunity.
The companies that will be best positioned are already asking more strategic questions:
- Which suppliers drive the highest CBAM exposure?
- Where can better data reduce certificate costs immediately?
- What are the most cost-effective decarbonisation levers across the supply chain?
- How will carbon costs affect pricing, sourcing, and margin over time?
In other words, they are moving from compliance to strategy.
CBAM is not just about reporting emissions. It’s about managing the financial impact of carbon across your supply chain.
Focusing only on internal processes
Much of the CBAM preparation happens at headquarters. Legal, compliance, and sustainability teams build the framework. That’s necessary, but it’s not sufficient on its own.
CBAM readiness is ultimately determined at the installation level.
Producers need to measure emissions at site level, translate process data into product-level figures, and ensure those numbers can stand up to verification. Many don’t yet have the monitoring systems or methodologies in place to do that.
This creates a disconnect. The importer may feel prepared, but if their suppliers cannot produce verified data, the whole system breaks down. This applies even more to companies onboarding new suppliers regularly. The true cost of a product will be determined by its emissions intensity and the quality of supporting data, not just the quoted price.
In practice, CBAM readiness is won or lost on the factory floor, not in the boardroom.
Treating CBAM reporting as a passive exercise
Issuing a data request to suppliers does not mean that good quality data will come back. In fact, suppliers typically fall into two camps when it comes to CBAM data.
In the first case, there are those without any kind of carbon measurement or accounting in place. This means that when suppliers receive the CBAM reporting request from customers, it’s impossible for them to fill in accurately. To gather accurate information, it’s critical that importers partner with their suppliers on training and skills development to improve their ability to report good data.
In the second group are those who have data but see CBAM compliance as too time consuming. For these suppliers, it’s equally important that they understand the business risk if they do not comply. Many suppliers still see CBAM as just another sustainability exercise, but do not understand that if they do not deliver data, their products will get materially more expensive when entering the EU. Importers must make this business case clear to suppliers.
All CBAM data will eventually need to be verified at the factory level, often paid for by the supplier, which makes developing strong supplier partnerships critical. Sending a data request and passively waiting for a response will not work.
Underestimating the cost of poor emissions data
Many organisations assume that if perfect data isn’t available, they can rely on estimates or default values. Technically, they can. Commercially, it’s a problem.
Default values are deliberately conservative. They can significantly overstate actual emissions, which means companies end up buying more CBAM certificates than necessary. Poor data can inflate costs by 30–50%, which turns data quality into a direct margin issue, not just a compliance detail.
Accurate, verified emissions data is not just about meeting requirements. It’s one of the most immediate levers companies have to control their carbon costs.
Assuming the rules are settled and won’t evolve
It’s tempting to treat CBAM as a fixed regulation and design a one-time compliance response. That’s a mistake.
CBAM is still evolving and is likely to expand in its scope. The EU has already proposed extension of the scope to downstream products made from Steel and Aluminium in 2028, and it’s likely that we will see an expansion to further product categories by 2035. A robust supplier decarbonization program takes time to develop, so even companies not yet in the crosshairs should start preparing now.
Additionally, CBAM is causing a ripple effect globally. In an effort to onshore tax revenues, countries with heavy export volumes to the EU (eg. India, Vietnam, Malaysia, China) are implementing and strengthening their own carbon taxes and emissions trading schemes. This means that even companies not exporting directly to the EU may feel this indirect effect very soon.
CBAM is often framed as a regulatory deadline. In reality, it’s a structural shift in how global trade accounts for carbon. The companies that struggle will be the ones that treat it as a last-mile reporting problem.
The ones that get ahead will be those that fix their data at source, engage suppliers early, and treat carbon as a cost they can actively manage.
