We spoke with Jerónimo Casas, Global Product Manager – Climate Change & Sustainability Solutions at SGS, the world's leading inspection, verification, testing and certification company, about the challenges facing the steel industry in adapting to CBAM, the requirements for emissions data verification, and how prepared companies are for this process. Casas also shared his insights into how CBAM could affect steel producers' competitiveness, global trade flows and market dynamics in the EU over the long term.
To begin with, could you briefly explain how CBAM works in practice and what the main requirements are for companies importing goods into the EU?
The simplest way to explain CBAM is that it extends the EU's carbon-pricing principle to certain imported goods.
European producers already face a carbon cost through the EU ETS. CBAM was introduced to reduce carbon leakage by ensuring that certain imports also face a carbon cost linked to their embedded emissions.
The transitional phase, from October 2023 to December 2025, was essentially a reporting and learning period. Since January 2026, CBAM has moved into its definitive phase, with annual declarations and a financial obligation through CBAM certificates. If actual emissions are declared, they must be independently verified by an accredited verifier.
The key point on responsibilities is that the producer outside the EU is responsible for generating reliable emissions data, while the EU declarant remains responsible for the CBAM declaration and the associated financial obligation.
As CBAM moves into its definitive phase, what are the main challenges companies face in obtaining reliable and verifiable emissions data from their suppliers, particularly in carbon-intensive sectors such as steel?
CBAM shifts significant data-quality responsibility onto the importer, while the underlying emissions data sits with non-EU suppliers, which creates both technical and commercial challenges.
This is particularly challenging in complex production process sectors such as steel.
Data quality is another pain point. Suppliers might be using methodologies, emission factors or systems developed in compliance with other standards, mainly voluntary, that do not meet CBAM requirements.
A key issue for operators is also that of ensuring that their emissions data is not only calculated correctly but is also traceable and verifiable. This means having an appropriate monitoring plan, retaining the underlying evidence, and being able to demonstrate how the data flows from primary records into the CBAM emissions report.
So CBAM is ultimately not just a reporting exercise. It requires a robust monitoring and evidence system that can withstand independent verification.
How prepared are non-EU steel producers currently for CBAM verification? Do you expect significant differences in readiness among major exporting countries such as Turkey, China and India, and could these differences ultimately affect their competitiveness in the EU market?
Readiness varies, but I would be cautious about attributing those differences simply to geography. What matters more is the importance of the EU market to the producer, the maturity of its emissions monitoring systems, and the resources it has dedicated to CBAM compliance.
For steel, the complexity of the supply chain adds another dimension. Producers may need verified emissions information relating to relevant precursor materials, so their readiness can also depend on the quality and availability of data further upstream.
These differences may indeed affect competitiveness and suppliers that can provide reliable and verified actual values will be better positioned to support their European customers.
Steel supply chains are often complex, involving different production routes, raw materials and, in some cases, multiple installations before the final product reaches the EU. What are the most common difficulties you encounter when calculating and verifying the embedded emissions of steel products?
Steel is particularly complex because emissions can build up through several stages of the value chain. You need to account not only for emissions generated in producing the final CBAM product, but also for the embedded emissions of relevant precursors.
That creates dependencies on upstream suppliers, particularly where precursor materials come from different installations. There can also be complexity in allocating emissions where one installation produces several products.
For verification, all of this needs to be traceable from primary data to the emissions report.
For heavy industries such as steelmaking, engaging an accredited verifier well in advance is essential to avoid business disruption. What realistic timeline should companies follow to begin the verification process, and what are the most common administrative obstacles slowing down accreditation?
Companies planning to report actual emissions should prepare for verification early. They need a compliant monitoring plan, completed calculations and sufficient supporting evidence before the verification can be finalised.
Early engagement also helps mitigate potential bottlenecks in verifier availability as reporting deadlines approach.
From our side, the accreditation process is well advanced, and assessments have already taken place. However, completion ultimately depends on the relevant National Accreditation Bodies, so it would not be appropriate to give a specific accreditation date.
For EU steel importers, there is also a risk of relying on emissions data provided by suppliers that may subsequently prove to be inaccurate or non-compliant. What safeguards are available to importers in such cases, and what due diligence should buyers carry out before accepting suppliers' emissions data?
Importers should not simply accept emissions data from suppliers at face value. One of the most effective safeguards is pre-verification, which can provide an early assessment of whether the supplier's monitoring methodology, calculations, data and supporting evidence are sufficiently robust for formal CBAM verification.
Importers can complement this with appropriate contractual provisions governing the provision of verified data and the allocation of CBAM-related financial risk. In addition. importers can work directly with strategic suppliers to help strengthen their monitoring and reporting systems.
There are significant differences in emissions monitoring and reporting capabilities across steel-producing countries. How can the CBAM system prevent inaccurate reporting or deliberate manipulation of emissions data, particularly in countries where monitoring systems are less developed?
I can see three main safeguards: accredited verification, accreditation oversight and regulatory controls and penalties. The key safeguard is independent verification. Actual emissions data must be assessed by an accredited verifier, including the underlying methodology, source data, controls and supporting evidence.
The accreditation framework provides an additional layer of assurance. Verification bodies must demonstrate appropriate technical competence and sector expertise, and they are themselves subject to oversight by National Accreditation Bodies.
This is complemented by controls at EU level to identify potential inconsistencies in reported data, together with the penalty regime established under CBAM.
So, while no system can eliminate the risk of manipulation entirely, the combination of independent verification, accreditation oversight and regulatory enforcement is designed to make inaccurate reporting significantly more difficult and detectable.
How does SGS check that the emissions data reported by steel producers is accurate and reliable, and how can it identify potential cases of manipulation or fraud?
SGS applies the verification methodology established in Commission Implementing Regulation (EU) 2025/2551, which defines both the verification process and the requirements that verification bodies must meet to obtain accreditation.
In simplified terms, we trace the information from the installation's primary records through to the final emissions report, checking that the data, calculations and supporting evidence are consistent and that the entire process complies with the applicable requirements for monitoring and reporting the embedded emissions of goods established in Commission Implementing Regulation (EU) 2025/2547.
SGS assesses the methodology applied, data sources, emission factors, attribution criteria, and mass and energy balances where applicable, and performs cross-checks and sampling tests to identify inconsistencies, omissions or deviations from the available evidence.
If discrepancies are identified, we request clarification and additional evidence and, where necessary, extend our testing, including by increasing the sample size, to assess the nature and potential impact of the issue.
While verification cannot eliminate fraud entirely, it significantly reduces the risk that inaccurate or insufficiently supported data are accepted.
In the long term, do you expect CBAM to change the way steel producers compete in the EU market, particularly in terms of their emissions performance and access to European buyers?
I expect CBAM to change competitive dynamics, but probably in several ways and in the medium to long term. Some producers with significant exposure to Europe may invest in reducing their emissions intensity and in providing reliable, verified data. Others may decide that the additional carbon cost and compliance requirements make alternative markets more attractive.
At the same time, CBAM, together with the broader EU trade framework for steel, could strengthen the relative position of European production. So, the result may not simply be competition between high- and low-carbon foreign suppliers. We could also see changes in sourcing patterns, trade flows and the balance between European production and imports.
Find out more about SGS CBAM services: sgs.com/cbam
About the author
Jerónimo Casas, Global Product Manager – Climate Change & Sustainability Solutions, SGS.
Jerónimo Casas leads the global development of climate change and sustainability services at SGS, supporting organizations with greenhouse gas verification, mandatory emissions reporting - including EU ETS, CORSIA and CBAM, product carbon footprints and life cycle assessments. He brings 25 years of experience in environmental services across a wide range of industrial sectors.
Contact: Jeronimo.casas@sgs.com
Preparing for CBAM?
SGS supports importers, producers and supply-chain partners with CBAM readiness, emissions monitoring and reporting, pre-verification and independent verification services.
Find out more about SGS CBAM services at sgs.com/cbam or you can speak to SGS experts via industries.environment@sgs.com.
