How Digital Product Passports Can Streamline Your CBAM Compliance Journey

Construction businesses, steel manufacturers, and many other organisations operating in the EU now face a new regulatory imperative as the Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on 1^st January 2026.

Importers of a multitude of intermediary products in the EU will now need to purchase CBAM certificates for embedded carbon emissions, with the first declarations due in September 2027. At the same time, the EU's Ecodesign for Sustainable Products Regulation (ESPR) is introducing Digital Product Passports (DPPs) as the foundation for product-level sustainability.

For organisations in affected sectors, this convergence allows leveraging the overlap between CBAM and DPP requirements to build a more efficient compliance path.

What is the Carbon Border Adjustment Mechanism (CBAM)?

CBAM prevents carbon leakage by imposing a carbon price on imports that mirrors the cost EU producers face under the Emissions Trading System (EU ETS). During 2024, organisations participating in the transitional reporting phase of CBAM captured millions of tonnes of CO2-equivalent emissions.

The regulation applies to EU importers bringing in more than 50 tonnes annually of:

• Iron and steel
• Aluminium
• Cement
• Fertilisers
• Hydrogen
• Electricity

From January 2026 onwards, companies importing items from this list have to purchase CBAM certificates with emissions data verified by accredited third parties. Declarants must hold certificates covering at least 50% of year-to-date embedded emissions by each quarter's end.

The European Commission has stated that as much as 80% of emissions that are reported need to be based on data from product manufacturers and producers. Alongside this, it’s likely that there will be an expansion to a further tranche of steel and aluminium products from 2028 onwards.

The Broader EU Sustainability Landscape

CBAM aligns with parallel EU frameworks:

• ‍ESPR and Digital Product Passports: The ESPR Working Plan 2025-2030 prioritises steel, aluminium, and construction materials for ecodesign requirements and DPP implementation, with delegated acts expected in 2027-2028.‍
• CSRD: Organisations subject to CBAM often face Corporate Sustainability Reporting Directive (CSRD) obligations. Product-level carbon data collected for CBAM can inform broader sustainability disclosure.‍
• Construction Products Regulation (CPR): The revised CPR mandates embodied carbon data for construction materials, creating additional reporting requirements for cement and steel sectors.

What Are Digital Product Passports?

DPPs are digital data containers capturing product-level sustainability information throughout the lifecycle, providing regulated, permissioned access to:

• Product identity and unique identifiers
• Material composition and origin
• Environmental footprint metrics (including carbon intensity)
• Circularity information (durability, repairability, recyclability)
• Compliance evidence and certifications

For organisations managing CBAM emissions tracking, DPPs represent an opportunity to capture overlapping data once and leverage it across multiple compliance obligations.

How Do Digital Product Passports Streamline CBAM Compliance?

1. Eliminating Data Duplication Through Shared Infrastructure

The datasets required by both CBAM and the ESPR overlap substantially. For example, CBAM requires detailed Scope 1 and sometimes Scope 2 emissions tracking. It is expected that the ESPR will require DPPs to track both Scope 1 and 2 emissions, as well as Scope 3 emissions, in order to be compliant.

CBAM requires product data regarding product composition and material origins to calculate the embedded emissions across these materials – it is expected that the ESPR will require DPPs to include this information also to comply with the requirement for provenance of raw materials.

For companies with a proactive mindset, tackling both pieces of legislation simultaneously can result in a reduction in information siloes, increase harmony across teams within the organisation, and eliminate the duplication of data collection efforts – naturally leading to cost savings.‍

‍2. Verification and audit trails

Both CBAM and the ESPR will likely require third-party verification and complete, auditable records. One verification infrastructure supports both frameworks. By implementing DPPs capturing both CBAM emissions data and broader ESPR requirements, organisations avoid duplicating their compliance efforts on multiple systems.

Rather than using separate systems, a unified approach captures emissions data, material composition, supplier verification, and recycled content, helping organisations streamline their reporting for the ESPR, CBAM, and CPR, reducing the overall administrative burden.

3. Future-Proofing with Infrastructure

It’s expected that CBAM will continue to expand its reach in future, covering additional sectors and product lines. DPPs help organisations to be more proactive in their compliance approach by providing a nimble data architecture that can easily be rolled out to new product types.

Equally, as the ESPR rolls out in phases, organisations implementing DPP infrastructure proactively will position themselves ahead of the curve, adapting existing data structures to accommodate the expansion of both the ESPR and CBAM, rather than having to react to each new regulatory requirement that’s passed.

4. Enabling Sector-Specific Advantages

For steel, aluminium, and construction, DPPs deliver benefits beyond compliance. For example, within steel production, carbon levels tend to fluctuate, and measurements can potentially be obscured by external factors.

DPPs can be used to capture and display granular data at a product level to help both the producer and importer reliably demonstrate that their production methods result in low emissions – especially helpful for manufacturers investing in green steel, as the access to reliable sustainability data via DPPs becomes a differentiator in the market.

For aluminium products, DPPs can showcase electricity sources and document recycled aluminium, showcasing how much of the energy used is from renewable sources and other relevant sustainability data. This supports CBAM compliance and circular economy business models.

Construction faces CBAM for imported materials, the revised CPR mandating embodied carbon declarations, and upcoming ESPR DPPs. The data contained within DPP works to serve all three frameworks.

Verified emissions information and demonstrated recyclability also help tackle growing customer demands for transparency, transforming compliance data into commercial assets.

Building Your Compliance Roadmap

The convergence of CBAM's financial obligations and ESPR's product lifecycle requirements means that Digital Product Passports offer an efficient path forward to capture the overlapping data requirements of both frameworks within a single, scalable data infrastructure.

The window for preparation is narrowing. CBAM's first annual declaration is due on 30^th September 2027 for goods imported in 2026. Steel and aluminium DPP delegated acts within the ESPR are expected in 2026 at the earliest. Organisations that begin building their infrastructure now navigate both frameworks more effectively than those addressing each requirement in isolation.

How Provenant Can Help

Provenant's Digital Product Passport platform can help organisations capture and demonstrate data needed for both CBAM and ESPR compliance.

Our platform can display the product-level emissions data, material composition, and lifecycle events that facilitate supply chain traceability required for accurate CBAM reporting. Built in alignment with EU DPP standards, we future-proof your organisation and enable robust compliance with new sustainability regulations.

Through our open API, Provenant connects seamlessly with your existing ERP, PIM, PLM or other legacy systems, automatically synchronising product data and emissions calculations without disrupting established workflows.

We understand the specific challenges facing Steel, Aluminium, and Construction industries. Our platform accommodates the complexity of multi-precursor materials, different production routes, and the granular data requirements unique to carbon-intensive industries.

While regulatory adherence drives initial adoption, our platform delivers broader value to support sustainability reporting, enable circular business models, and provide verified sustainability data increasingly demanded by conscious customers and regulators.

CBAM certificates must be purchased from February 2027. ESPR delegated acts for priority sectors arrive as early as 2026. Contact Provenant today to learn how our Digital Product Passport platform can streamline your path to both CBAM and ESPR compliance.