European Commission guidance on the Carbon Border Adjustment Mechanism (CBAM) sets out how upstream emissions data must be documented when calculating embedded emissions for finished or complex goods. The rules address how emissions from precursors manufactured at separate installations are accounted for in the verification process. The requirements are set out in the Commission’s CBAM Questions and Answers, updated on 15 October 2026.
The guidance describes two approaches for determining precursor emissions used in CBAM calculations. Manufacturers can apply relevant default values or use actual emissions that have been independently verified. The choice affects what information must be available for verification of complex goods.
Independent verification for actual precursor emissions
Where a downstream operator applies actual values, the operator producing the precursor must provide verified emissions information to the manufacturer of the complex good. Only actual values included in an appropriate verification report can be used in the embedded-emissions calculation. A commercially supplied figure without the required supporting verification evidence is not sufficient for incorporation into the calculation.
The verifier responsible for the final product must be able to examine the report supporting precursor data. The verifier then assesses whether the figures can legitimately be incorporated into the final embedded-emissions calculation. This links upstream documentation directly to formal CBAM verification, particularly in supply chains involving multiple installations and companies before products enter the EU market.
Supplier evidence requirements for Serbia and Southeast Europe
For exporters in Serbia and other Southeast European countries, compliance depends on information obtained beyond their own production facilities. Steel processors purchasing inputs from other mills and aluminium manufacturers using externally produced precursor materials may need installation-specific verified data from suppliers if they intend to apply actual values. If an upstream supplier cannot provide acceptable verified emissions information, downstream manufacturers may need to use applicable default values.
The guidance indicates that financial outcomes depend on the emissions attributed to each precursor. Where default values exceed a precursor’s actual carbon intensity, CBAM liability for the final product may be higher even if downstream operations are efficient. Supplier assessments may therefore need to consider emissions-data quality alongside conventional purchasing criteria such as price, product grade, delivery reliability and product certification.
CBAM Registry transfer timeline and bilateral data exchange
The Commission also clarified expected arrangements for transferring verified precursor emissions information between operators. From 2028, operators are expected to exchange actual verified precursor emissions directly through the CBAM Registry. During 2027, however, information exchange is expected to occur outside the Registry.
This creates a reliance on bilateral information-sharing during the first compliance cycle. Suppliers and downstream manufacturers may need agreements covering emissions data, corresponding verification reports, installation identifiers, reporting periods and supporting evidence required by the verifier of the complex good. Contracts may also need provisions addressing cases where a supplier commits to providing actual emissions data but fails to obtain necessary verification.
Matching precursor reports to reporting periods
The guidance sets out a default method for matching precursor verification reports to the reporting period of the complex good. The verifier will normally assess the report corresponding to the reporting period, or production year, of the final product. An alternative is permitted where sufficient evidence establishes the precursor’s actual production period.
In that alternative case, the verifier may use the report associated with the period in which the precursor was produced. The distinction increases traceability needs at lot or batch level, particularly where inventories move between reporting periods. Manufacturers need to connect precursor materials with relevant production periods and supporting emissions documentation.
Carbon-data reliability in due diligence and procurement
The evidence requirements introduce additional supply-chain risk for industrial buyers and their financing partners. A manufacturer may maintain an internal monitoring, reporting and verification (MRV) system but still face greater CBAM exposure if an upstream supplier cannot produce acceptable verified emissions data. Carbon-data availability may become relevant to supplier due diligence, procurement agreements and working-capital planning.
Contractual provisions may also be needed to address commercial consequences of missing or unverifiable emissions information. The implications could extend further if CBAM coverage expands to additional downstream products, since each additional manufacturing stage may require verified emissions information to remain traceable as materials move from primary production through processing into finished goods.
For Southeast European steel and aluminium exporters, requirements link lower-carbon production value to supporting evidence quality under CBAM. A precursor’s actual emissions performance must be documented and verified through the supply chain if downstream manufacturers are to rely on those values in their embedded-emissions calculations.