As the world strives towards net zero emissions, energy-intensive industries like mining, minerals, energy and manufacturing are under immense pressure from stakeholders including customers, partners, staff and government to measure and reduce their impact on climate change.
Now, with the introduction of EU CBAM, organisations have a short runway to meet the looming compliance and reporting deadline set for October 2023, in advance of the full rollout in 2027.
Accurately measuring and reporting on carbon emissions is a critical issue for organisations globally. However, a BCG Carbon Management Survey1 of executives across nine major industries globally found that 91% fail to measure emissions comprehensively. So there is a lot of catching up to do, and fast!
For business leaders and CFOs, now is the time to prepare for CBAM to protect and grow your operations, financials and reputation.
Drawing on over 10 years of experience in process engineering, data-led software and sustainability reporting in the resources sector globally, we can help you understand how CBAM impacts your organisation and share digital tools to make sure you’re ready.
Legislated as part of the European Green Deal, the Carbon Border Adjustment Mechanism (CBAM) – also referred to as the carbon border tax – is a tariff applied to a range of carbon intensive products that are imported by the European Union (EU).
CBAM puts a price on carbon intensive products as they enter the EU. At this stage the categories impacted are likely to include iron and steel, cement, fertiliser, aluminium, electricity, chemicals, polymers and hydrogen.2
Whether your organisation manufactures in the EU or is a non-EU-based supplier to these organisations, CBAM compliance requirements will apply to in-scope products from October 2023. While the EU is leading the way, other regions such as Australia, Canada and the UK are weighing up similar policies.3
The overarching goal of CBAM is to create green supply chains and reduce carbon emissions in line with the accelerating global movement towards sustainability.
CBAM goes further than just reporting on an organisation’s direct emissions (Scope 1), requiring measurement and reporting on indirect electricity and other indirect emissions (Scopes 2 and 3).
With Scope 3 emissions accounting for most of the mining sector’s emissions – and a significant contributor to energy-intensive industries – organisations that have not yet begun to calculate their indirect emissions already have catching up to do.
“Those that struggle could face significant administrative burdens, higher costs, and supply chain disruptions as goods get stopped at the border. Companies that have a firm grip on the new system could gain a competitive advantage.”
Evolving frameworks across global governing bodies are rapidly elevating sustainability reporting to the same level as financial statements in terms of accountability, scrutiny and priority – making it a CFO-level responsibility.
Built using a similar approach to accounting standards, the proposed new disclosure standards driven by the International Sustainability Standards Board (ISSB) will merge existing and developing frameworks with input from over 20 governing bodies and partner organisations. The ISSB is expected to issue final standards early in 2023.
EU producers and non-EU suppliers will need to prepare data capture and reporting capabilities to meet the quarterly CBAM reporting requirements that begin from October 2023.
Equipped to manage CBAM’s complex reporting and compliance policies, providing granular reports on GHG emissions, energy and water consumption. For example, this case study details see how we identified US $21m per year in lost acid production through data-driven sustainability reporting.
Reports on direct and indirect greenhouse gas emissions and plant energy consumption on an hourly and daily basis (automated) in near real time.
MI can capture and report on data directly related to the industrial asset it has been implemented in, including transportation emissions and emissions on third party reagents and chemicals used as part of the production process.
Metallurgical Systems is able to assist with CBAM verification and compliance by providing a complete auditable dynamic mass and energy balance of the industrial process at every step of production.
MI is compliant with dominant global frameworks including SASB, GRI and local stock exchange guidelines. It gives you the freedom to generate custom reports on GHG emissions, air quality, energy management, water management, waste and hazardous materials management, tailing storage facilities management, Product Carbon Footprint or Life Cycle Assessment (LCA) metrics can be queried – so you have the power at your fingertips to meet the demands of evolving guidelines.
Easily adapts to diverse regulations and governance frameworks and requirements across different sites and countries as well as captures changes in emissions caused by any variations in the production process across the supply chain.
Functionality to test future scenarios and tie information back to financials to set budgets and forecasts in line with CBAM requirements. Helps identify trouble spots and poor performance enabling informed and proactive optimisation.
MI is unique in that it generates a plant-wide mass and energy balance derived directly from automated integration to source data. Applying Industry 4.0 technology such as big data, machine learning, dynamic simulation, multi-dimensional databases and advanced analytics and visualisation tools, it delivers granular hourly reporting at every step in the process. Many plants assume input = output. With MI, input = output + accumulation, with inventory traced as a function of time. This is the secret to true transparency and accuracy.