The CO₂ border adjustment system (Carbon Border Adjustment Mechanism – CBAM for short) has long been more than just a reporting requirement. Since January 2026, imported goods from emission-intensive sectors have been subject to a CO₂ price. To support customers in this task, SAP is launching an integrated, end-to-end CBAM solution. It is initially aimed at CBAM reporters and is based on SAP Sustainability Footprint Management and SAP Green Ledger and will be gradually expanded in the future to fully support the needs of users.

Companies must quantify these emissions, reflect the resulting liabilities in accounting, withstand audits and ultimately prepare to offset CO₂ costs via certificates linked to the EU emissions trading system.

In practice, this means: CO₂ becomes a real cost factor – with a direct impact on margins, cash flow and procurement decisions, similar to other cost drivers.

Why CBAM is relevant now

CBAM affects almost all areas of the company. Finance teams manage liabilities and prepare cost forecasts. Procurement teams need emissions data from suppliers and must incorporate it into their sourcing decisions. Trade and compliance teams ensure imports are classified and reported correctly.

No department can do this alone. And the financial consequences depend on operational data – and operational decisions are increasingly based on the CO₂ cost risk.

The regulation initially applies to imports of iron and steel, aluminum, cement, fertilizers, hydrogen and electricity – from an annual threshold of more than 50 tonnes for CBAM declarants. This means that the formal reporting requirement primarily affects larger importers. However, the effects extend far into the supply chains: companies are increasingly demanding detailed and verified emissions data from their suppliers and are adapting their procurement strategies accordingly.

From reporting requirements to financial obligations

From 2026 onwards, not only what companies have to report will change, but also the consequences. The import of goods subject to CBAM into the EU creates a CBAM obligation for approved CBAM declarants – measured by the verified embedded emissions of the imported goods. These liabilities accumulate throughout the year and must be reported, audited and settled by purchasing and surrendering CBAM certificates in 2027.

This results in a continuous compliance cycle with clear, unambiguous financial implications:

• Emissions must be recorded in order to determine the need for certificates.
• Liabilities accumulate throughout the year.
• To cover these liabilities, certificates must be purchased, managed and surrendered.

For finance teams, this represents constant risk that requires active management. For procurement and supply chain teams, this means that costs now depend directly on suppliers’ emissions data.

An integrated approach to implementing the CBAM requirements

Many companies currently manage CBAM through various systems, spreadsheets and manual processes. But when it comes to audits and increasing import volumes, this approach reaches its limits.

SAP's approach combines the most important elements of CBAM management in a networked process: data collection and allocation, emissions and cost calculation, analysis, CO₂ accounting and financial accounting of liabilities, certificate management and preparation of declarations.

SAP will offer an integrated, end-to-end solution for CBAM applicants based on SAP Sustainability Footprint Management and SAP Green Ledger was designed. It builds on SAP's expertise in the areas of carbon accounting and financial management.

This new approach enables companies to move from fragmented workflows to an integrated solution that is linked to core business processes.

SAP Sustainability Footprint Management will form the operational backbone for CBAM and help create a reliable data foundation. The focus is on customs data such as import records and CN code classification, which are retrieved from SAP Global Trade Services and other trading systems. Without this layer, it is difficult for companies to find out where the CBAM regulation applies.

Based on this, SAP Sustainability Footprint Management helps to bundle CBAM-relevant ERP, trade and supplier data in one place. Emissions data from suppliers can be imported via Excel uploads and processed automatically. In addition, the solution calculates embedded emissions, allowance requirements and estimated CBAM costs. A special CBAM dashboard provides information about emissions and cost risks. Integrated reporting functions support the creation of CBAM reports that can be submitted directly to EU authorities.

Available now: Controlling the financial burden of CBAM with SAP Green Ledger

A key competitive advantage in CBAM preparation is the ability to connect CO₂ emissions data with financial processes. Starting now, companies can use the SAP Green Ledger to track the required number of certificates, evaluate them as financial liabilities, continually revalue them based on price changes, and post financial impacts to the appropriate accounts. This is the level of accountability that finance teams and auditors expect – in line with International Accounting Standards.

Thanks to this integration, companies can:

• Record, evaluate and regularly reassess CBAM liabilities,
• Track certificate holdings and their assessment (coming soon),
• support audit-proof reporting and control,
• Predict and plan liquidity impacts (coming soon),
• Break down and manage costs at the product level (coming soon).

Most companies currently treat operational data and financial impacts separately. But with the help of these functions, this information can be brought together.

Beyond compliance: enabling better decisions

Although CBAM is often seen as a burdensome compliance task, the legal norm also offers the opportunity to improve decision-making. If the costs of CO₂ emissions are made visible and integrated into business processes, companies can identify where their risks lie and where measures will bring the greatest benefit.

With better data, companies can:

• identify costly goods with particularly high emissions in their supply chains,
• Make supplier decisions based on emissions and carry out cost considerations,
• improve forecasting and budgeting for CO₂-related costs,
• Reduce reliance on conservative and costly defaults by using real data.

This does not eliminate the costs. But administration becomes easier and costs can be reduced in some cases.

What you should focus on now

As the final phase of the CBAM has begun, building a reliable data base should now be an immediate priority. This includes precise customs data and a clear allocation of where the CBAM regulation applies. Another necessity is supplier connection. In order to collect verified emissions data, structured contact and structured follow-up processes are often required. Tools like SAP Sustainability Data Exchange support communication with suppliers and data collection. But the effort for organizational and technical considerations remains.

The solution helps companies find out which goods in their import portfolio are affected by CBAM. This way you can ensure the necessary data flows. It also helps plan the solution architecture to optimize total cost of ownership and ensure seamless automation and integration into business functions. In addition, the calculation of emissions is comprehensible and audit-proof. This influences behavior. CO₂ pricing is now a crucial planning factor that no team can ignore anymore.

At the same time, companies must determine how CBAM data flows into finance. Linking emissions, liabilities and certificates to financial systems at an early stage helps to avoid rework and reduce audit risk.

The next steps

The CBAM regulation initiates a fundamental change: it changes how environmental impacts are reflected in company performance. In the future, CO₂ emissions will be recorded, priced and controlled alongside other cost factors.

Companies that only see CBAM as a periodic reporting obligation are likely to remain permanently in reaction mode. However, those who integrate the regulations into financial and operational decision-making processes will be much better positioned to manage the impact.

For more information, see sap.com/carbonaccounting.

Gunther Rothermel is Chief Product Officer for SAP Sustainability.