Verification Requirements

Verification Requirements

Why Independent Verification Is Essential

Self-reported emissions data creates obvious risks. A producer in a third country who knows their embedded emissions will determine a significant financial cost to their EU customer has every incentive to report the lowest possible figure - or to provide no data at all, forcing the importer to use conservative default values and absorb the commercial disadvantage. Without independent verification, CBAM's environmental integrity would rest entirely on the goodwill of foreign producers, which is not a reliable foundation for a regulatory system.

Article 10 of the CBAM Regulation therefore requires that embedded emissions for imported goods be verified by an accredited verifier, following principles and procedures consistent with those already established for EU ETS Monitoring, Reporting and Verification (MRV). The verification requirement is the anchor that gives CBAM credibility as a carbon pricing mechanism rather than merely a reporting exercise.

Who Can Act as a Verifier?

Verifiers for CBAM purposes must be accredited under the requirements set out in the CBAM Regulation and its implementing provisions. Accreditation is granted by national accreditation bodies in EU member states, following the principles of Regulation (EC) No 765/2008 on accreditation. The accreditation body assesses whether the verifier has the technical competence, impartiality, and quality management systems required to verify embedded emissions data reliably.

Verifiers may be based in the EU or in third countries. A verifier established in the country where the installation is located may be more practical from a logistical standpoint - they can conduct site visits more easily. However, they must still hold accreditation recognised for CBAM purposes, either through direct accreditation in an EU member state or through a mutual recognition arrangement.

The Verification Process

Article 7 of the Implementing Regulation outlines the verification process. Verification of embedded emissions involves two complementary activities:

• Document review: The verifier reviews the installation's monitoring plan, activity data records, emission factor sources, production data, and calculation worksheets. They assess whether the monitoring methodology is consistent with the CBAM requirements and whether the calculations are arithmetically correct.
• Site visit: For initial verification and periodically thereafter, the verifier must conduct a physical visit to the installation to assess whether the monitoring systems described in the monitoring plan are actually in place and functioning. They inspect fuel meters, production records, mass balance documents, and any continuous emissions monitoring equipment.

The verifier applies a materiality threshold: discrepancies in the reported embedded emissions below a defined level of significance (typically 2% of total embedded emissions, or 2% of the monetary value of the CBAM liability) are classified as "immaterial" and do not trigger a modified verification opinion. Discrepancies above the materiality threshold result in either a qualified or adverse verification opinion.

Verification Opinions

At the conclusion of the verification process, the verifier issues a verification report containing one of the following opinions:

• Unqualified (positive) opinion: The embedded emissions data presents a true and fair picture of actual production conditions, and the calculations are consistent with the CBAM methodology. The declarant can use this data for their CBAM declaration without adjustment.
• Qualified opinion: The data is materially accurate in most respects, but there are one or more specific areas of limitation or uncertainty that the verifier has identified. The declarant must consider the impact of these limitations.
• Adverse opinion: The embedded emissions data contains material misstatements and cannot be relied upon for CBAM compliance. The declarant must either obtain corrected data or fall back on default values.
• Disclaimer of opinion: The verifier was unable to obtain sufficient evidence to form an opinion - typically because access to the installation was refused or documentation was withheld.

The Transitional Period Exception

During the 2023-2025 transitional phase, the verification requirement was relaxed: importers were allowed to self-report embedded emissions without independent third-party verification. This was a pragmatic concession recognising that the global verification infrastructure for CBAM purposes did not yet exist - accreditation schemes needed to be established, verification bodies needed to build competence, and installations needed time to set up their monitoring systems.

From 2026, the full verification requirement applies. Embedded emissions submitted using actual data must be accompanied by a verification report from an accredited verifier. Data submitted without such a report - or with an adverse or disclaimer opinion - is treated as equivalent to no actual data provided, meaning the relevant default value applies instead.

Building Verification Capacity in Third Countries

A significant operational challenge for CBAM is the limited availability of accredited verifiers in the countries where most CBAM-affected production takes place. China, India, Turkey, and Russia together account for a large share of the goods that will be subject to CBAM, yet these countries have historically had limited infrastructure for the type of third-party GHG verification that CBAM requires.

The European Commission has committed to supporting capacity building in third countries, including through the provision of guidance documents, training programmes, and technical assistance. Several accreditation bodies in major exporting countries have begun developing CBAM-specific accreditation schemes to address this gap, recognising the commercial opportunity for well-qualified verification service providers.