CBAM verification just got more practical – and more demanding
The European Commission’s guidance on CBAM verification and accreditation, published on 24 August 2026, runs to more than 140 pages. It does not introduce a new set of legal requirements. What it does is arguably just as important: it explains in considerably more detail how CBAM verification is expected to work in practice. For steel and other carbon-intensive sectors exporting into the EU, the message is increasingly clear. Producing a carbon calculation will not be enough. Companies will need to demonstrate that the systems, controls, methodologies and evidence sitting behind that calculation can withstand a rigorous verification process.
Reasonable assurance means more than checking the calculation
CBAM requires verification at a reasonable level of assurance. The new guidance gives much greater clarity on what this means in practice. The verifier needs sufficient evidence to conclude that the emissions report is free from material misstatement. That requires considerably more than checking spreadsheets at the end of the reporting period. The Commission describes a process involving strategic analysis, risk analysis, verification planning, testing of data flows and control activities, data verification, analytical procedures, site visits, internal verification documentation and independent review.
Importantly, the guidance explicitly contrasts this with limited assurance, where the scope and depth of work would normally be narrower. This has a practical consequence for operators: CBAM readiness is as much about controls and evidence as it is about carbon accounting. Companies that leave verification until the calculation has been completed may find that apparently reasonable emissions numbers are difficult to verify because the underlying audit trail was never designed with verification in mind.
The monitoring plan matters
One of the most important practical messages in the guidance concerns the installation's monitoring plan. Unlike EU ETS verification, the CBAM verifier is responsible for assessing whether the monitoring plan complies with the relevant CBAM requirements. That makes the monitoring plan much more than an administrative document. It becomes the reference point against which the verifier assesses how emissions have been determined.
Companies need clearly documented installation and production-process boundaries, appropriate monitoring approaches, justified data sources, uncertainty assessments, allocation methodologies and controls. If these are unclear or inadequately documented, verification becomes substantially harder. Indeed, an inadequately assessed or insufficiently clear monitoring plan can ultimately prevent the verifier from obtaining enough evidence to provide a positive verification conclusion. For operators preparing for CBAM verification, reviewing the monitoring plan before the verification year closes should therefore be a priority.
CBAM verification isn't simply another GHG audit
Another useful clarification is that conventional GHG verification experience, while highly relevant, is not sufficient on its own. CBAM introduces verification requirements that do not routinely feature in corporate GHG assurance or other industrial emissions schemes. These include checking the installation's unique identity, the origin and production year of precursor materials, weighted averaging where different precursors are used, and specific requirements around imported heat and electricity.
This becomes particularly important for complex products. A steel product, for example, may contain embedded emissions inherited through several production stages. The integrity of the final number therefore depends not only on the emissions generated at the final installation but also on the reliability and traceability of upstream precursor information.
Materiality isn't a free pass
The guidance also provides useful clarification around the 5% materiality threshold. For specific embedded emissions and specific embedded free allocation, CBAM establishes a quantitative materiality level of 5% for each relevant good. But that should not be interpreted as meaning errors below 5% can simply be ignored. The Commission makes the point particularly clearly: materiality is not a tolerance band. Smaller errors can still be material because of their nature or circumstances, and identified misstatements and non-conformities should in principle be corrected.
A verification process designed simply to demonstrate that total errors fall below 5% misunderstands the purpose of materiality. The threshold informs verification risk and the verifier's conclusion; it does not replace the requirement to produce accurate information.
Existing EU ETS experience provides a head start – but not a passport
There is some good news for organisations already familiar with EU ETS verification. The Commission guidance maps CBAM accreditation activities against existing EU ETS accreditation groups and explains how existing EU ETS verifiers can extend their accreditation into CBAM. There is clearly substantial transferable expertise. But there are also CBAM-specific competencies that need to be demonstrated, including assessing monitoring plans, confirming production-process boundaries, evaluating whether data sources represent the best available information and dealing with CBAM-specific indirect emissions requirements.
For steel, the accreditation structure is particularly relevant. CBAM distinguishes between activities including production of sinter, pig iron, DRI and crude steel, and downstream iron and steel products. Selecting a verifier will therefore increasingly involve looking not simply for carbon assurance experience, but for the right combination of sector knowledge, accreditation scope and CBAM competence.
What should companies do now?
The companies best prepared for verification will be those that have already considered whether:
None of these concepts is particularly novel to experienced assurance practitioners. What is changing is the regulatory and commercial significance attached to them. Increasingly, the question will not simply be “how did you calculate this number?” It will be: “Can you demonstrate that the systems, evidence and controls behind the number are sufficiently robust for somebody else to rely upon it?” That is a much higher bar.
At Challenge Sustainability, we have worked for many years on both sides of that question – developing carbon accounting approaches and independently assuring the resulting emissions information. As carbon data increasingly influences regulatory compliance, product claims and commercial decisions, bringing those two perspectives together is becoming increasingly important. If you want to know more about our services in this area, get in touch via Jon.woodhead@challengesustainability.com