Meeting Climate Goals: The Role of Product Carbon Footprint Reporting in Regulatory Compliance

Climate change is a pressing issue, and as global warming concerns rise, nations are establishing regulations intended to decrease carbon emissions in areas of the highest impact. These regulations, such as the recently introduced Carbon Border Adjustment Mechanism (CBAM), often place responsibilities on businesses to track and reduce their product carbon footprint (PCF). 

What is a Product Carbon Footprint (PCF)?

PCF measures the impact your product has on global warming, considering the total amount of greenhouse gas emissions generated throughout the product’s lifecycle—from raw material extraction and manufacturing to transportation, use, and end-of-life management. 

PCF is typically expressed in kilograms of carbon dioxide equivalent (kg CO2e), allowing easy comparison between various products. 

How is PCF calculated?

To calculate a product’s carbon footprint, each party in a supply chain must first request the PCF value from its suppliers, and after calculating the PCF value of their own additional parts, they can add the two values and pass it up to the next party in the value chain. 

Currently, this is a tedious process as several methodologies and databases for PCF calculations are in use. This makes it difficult to compare multiple PCF values and, therefore, creates inaccuracies when those values are merged together. Additionally, the current process is not very efficient when a company is asked to provide specific PCF data to its customers or when it wants to find out which actions can help to reduce its own greenhouse gas emissions. 

Catena-X is one tool aiming to improve the way companies calculate PCF by providing a unified rulebook for creating, merging, and sharing supplier-specific PCF data.

Why is this important?

In today’s world, minimizing your environmental footprint is no longer just an option – it’s a business imperative. Many countries are implementing stricter regulations on carbon emissions, such as the CBAM, which will require accurate calculations for reporting compliance. 

In the long term, establishing a calculation strategy will help reduce efforts, introduce new measures for optimization, and better identify hotspots for reducing GHG emissions, potentially saving money on carbon fines and tariffs. 

If the manufacturer of a product needs transparency on the carbon footprint of their specific supply chain, they will need an overview of the specific PCF data collected from all direct suppliers whose parts or services they use for their product. 

Therefore, even if your company operates outside of a nation implementing carbon emission legislation, you may be required to support your customers on this, similar to how non-EU companies are asked to support EU REACH, ELV/IMDS, and EU RoHS. 

Get Help with Product Carbon Footprint Reporting

If you’re wondering where to start with CBAM or product carbon footprint reporting, don’t hesitate to contact Tetra Tech’s compliance experts today at [email protected]. We can help you understand your requirements and establish a PCF reporting action plan to keep you compliant despite evolving regulations.

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