Pee Vee Impex solves CBAM’s regulatory hurdle for expansion

Looking for a solution in the heat of CBAM regulations

An intricate part of modern life, steel commodities and engineering consumables have been woven into our lives in more ways than one. As per World Steel data, 219 kg of steel was used in new products per person globally in 2023. This high consumption of steel has also made it one of the highly exported and imported items. It also entails them to become regulated commodities. However, what happens when the creators of steel consumer durables face sudden regulation that threatens their existing trade routes? 

PEE VEE IMPEX, which specialises in manufacturing and exporting Complete Gates, Fences, Railings, Pavilions, Hand Tools, and Wrought Iron Components, was incorporated as a company in 2008 in Punjab’s Ludhiana. Since then, the company has maintained its status of being a leader in steel manufacturing and exporting to Europe. With advanced infrastructure and skilled staff, the organisation maintained high-quality product delivery while fostering long-term customer relationships.

However, with the implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM), PeeVee Impex faced a significant setback. They were caught in a dilemma during the identification of CBAM products, as per the CN codes published by the EU. They lacked internal systems and mechanisms to clearly understand and segregate CBAM products from non-CBAM items in their main products. Being a business with rapidly expanding operations and increasing business revenues, they were facing a compliance risk that was not under their direct control. 

Getting started with smart Precursor Data Collection

When importers requested PEE VEE IMPEX to share the quarterly emissions data for CBAM reporting, the company faced some significant setbacks in starting the compliance process. The primary challenge stemmed from a lack of clear understanding regarding precursor data collection and inadequate infrastructure for the same. Although the organisation had years of experience in exporting businesses, it did not have any established systems to collaborate on emission data collection with various supplier.

Additionally, third-party suppliers (vendors) were neither prepared with the necessary emissions data nor willing to share it. This reluctance was largely due to their misconception that, since they did not directly export to the EU, they were not obligated to provide such information.

The Sustainability Cloud’s advanced technical expertise in CBAM reporting successfully addressed the challenges associated with precursor data collection. Awareness training sessions and workshops were conducted for PEE VEE IMPEX’s workforce to enhance their understanding of the complexities involved in gathering precursor data. Through tailored consultancy and customised CBAM data-gathering solutions provided by TSC, the company effectively navigated these challenges and strengthened its supply chain network for efficient third-party data collection.

Optimising Production Routes to Reduce Complexity

CBAM-regulated products involve multiple production routes, each playing a role in the manufacturing of a single steel item. Consequently, the company faced considerable challenges in differentiating between these production routes, ensuring accurate data collection, and effectively segregating relevant information for compliance purposes.

The Sustainability Cloud provided essential support by categorising products and identifying distinct production routes. This differentiation optimised data collection processes for complex products, improving both accuracy and efficiency. Through the implementation of a robust digital data collection infrastructure and continuous collaboration with multiple suppliers, The Sustainability Cloud facilitated the seamless integration of diverse production processes using advanced tools and methodologies.