What Does Product Complexity Mean in CBAM?

Accurate Calculation Key: Defining Simple and Complex Products in CBAM Reporting

Borderline Carbon Adjustment Mechanism (CBAM) reporting takes into account the production history of a product when calculating its carbon footprint. At this point, the fundamental difference between "simple products" and "complex products" is a critical element that determines how the reporting process will work. So, what exactly is the difference between these two product types and how does CimpactPro software guide the user through this complexity?

What is the Difference Between Simple and Complex Products?

At the heart of this distinction is whether or not a product carries a "load on its back" when it starts the production process:

• Simple Products: Products that do not carry any upfront emissions burden when starting the production process. These products are assessed by the emissions generated during the manufacturer's own operations. For example, a product made from scratch from recycled material could fall into this category.
• Complex Products: Products that already "piggyback" an emissions burden from previous production processes in the supply chain before arriving at the final producer.

How Does This Distinction Change CBAM Reporting?

Classifying a product as simple or complex directly affects how CBAM reporting is done:

• Simple Product Reporting: In this case, the calculation is easier, faster and more practical. The reporting is largely based only on your own operational loads (e.g., energy consumed in production), because the product has arrived "unloaded".
• Complex Product Reporting: In this case the process is more detailed. In addition to your own operational loads, you need to contact the company that supplied the product to you and get information on the "upstream emission load" from that product. This data should be included in your CBAM report.

Same Raw Material, Different Design: Do Emissions Change?

So, are two products made from the same raw material but with different designs (e.g. two different cover designs) treated differently? The answer to this question depends on the energy and other consumables used in the production process.

If the production process of two different designs is identical in terms of the amount of material used, the energy consumed and other consumables, the emission result will be the same. However, if one of the designs requires more material or energy, the emission burden will differ accordingly.

How does CimpactPro manage this complexity?

So that the user does not struggle with these complex distinctions, CimpactPro intelligently guides the process. The software does not ask the user directly, "Is this product simple or complex?" Instead, it asks a single critical question that simplifies the process:

"Is there or is there not an upfront emissions burden you need to obtain from the supplier for this product?"

Based on the user's answer to this question, the software automatically determines in the background whether the product is simple or complex and prompts the user to fill in only the relevant fields. In this way, CimpactPro enables the user to complete the reporting process accurately and in compliance with standards, without additional terminology or calculation burden.