Comprehending CBAM and Carbon Accounting: A Way to Promote Greener Trade

In times of growing climate urgency, global businesses are being held accountable for their economic impact as well as their carbon footprint.

Two concepts leading the way in this transformation are carbon accounting and the CBAM. Carbon accounting helps organizations measure and manage their emotions.

CBAM is the bold policy of the European Union to level the playing field in global trade. However, they represent a major shift in the way companies are required to function in a decarbonizing global economy.

What is carbon accounting?

Carbon accounting is the process of measuring as well as tracking greenhouse gas emissions. These are generated by the following:

Organization
Product
Supply chain

Like financial accounting, it offers a secured and quantifiable view of emissions. It is often broken into the following three categories.

Scope 1

Direct emissions from owned or controlled sources

Scope 2

Indicted emissions from the generation of purchased electricity

Scope 3

All other indirect emissions from the value chain

This data is crucial for setting reduction targets along with making armoured sustainability decisions and meeting regulations or ESG standards. Companies increasingly depend on platforms like Greenly. It simplifies carbon accounting and reporting using intuitive digital tools as well as automation.

The rise of CBAM: What is it and how does it matter?

The Carbon Border Adjustment Mechanism is a key part of the Fir for 55 climate package of the European Union. It aims to reduce the net greenhouse gas emissions by 55% by 2030. It essentially is a carbon tariff on imports of carbon intensive products. The examples include the following.

Cement
Steel
Aluminium
Fertilizers
Electricity
Hydrogen

The purpose is to prevent carbon leakage. Carbon leakage is the practice where companies relocate production to countries with user climate regulations. Through the signing of a carbon price to imports equivalent to that paid by the EU producers under the EU Emissions Trading System, CBAM guarantees fairness. It also incentivizes global decarbonization.

Opportunities and Difficulties for International Businesses

It might be intimidating to implement carbon accounting and comply with CBAM, especially for businesses in nations with weak data infrastructure or environmental restrictions. Important difficulties include:

Quality and accessibility of data in intricate international supply networks
Limited internal knowledge of GHG reporting and measurement
Expense and work required to confirm emissions using third-party standards

However, there are also advantages to this change. Businesses that adopt carbon accounting at an early stage can:

Obtain a competitive edge in global commerce
Gain the confidence of investors and customers.
Find carbon hotspots to spur innovation and efficiency.
Comply with international ESG standards and draw in long-term funding.

Greenly: Simplifying Carbon Accounting for Smarter, Greener Business

One of the top carbon management platforms, Greenly, makes it simple for businesses to cut their greenhouse gas emissions. Greenly provides user-friendly solutions that comply with international standards. It has the goal of simplifying the intricate process of carbon accounting.

With automated data collection and user-friendly reporting tools, Greenly provides complete insight across Scope 1, 2, and 3 emissions. This is regardless of your company’s size. Greenly enables companies to meet climate objectives, get ready for laws like CBAM and show true sustainability leadership. They do so by transforming environmental compliance into actionable information.

Final words

Businesses need to move swiftly and strategically as carbon rules tighten and environmental standards increase. Greenly makes that shift strategic as well as manageable. Greenly assists businesses in taking charge of their carbon footprint by transforming complicated data into actionable steps through its intuitive platform and knowledgeable advice.

Greenly offers the resources and assistance you need to reach your goals, whether they are CBAM compliance preparation, net-zero objectives, or just improving ESG performance. Don’t allow the complexity of carbon to hold you back—join with Greenly and take the lead in a low-carbon future with assurance, openness, and influence.