Business Central offers support for the European Union's (EU) Carbon Border Adjustment Mechanism (CBAM) by helping you track and manage the carbon footprint of the goods you purchase and import from outside the EU. You can automatically calculate carbon-related costs based on the origin of your products and EU carbon pricing rules by using the Carbon Pricing page and fields on the Item Card page, such as:
- Source of Emission Data
- Emission Verified
- CBAM Compliance
Business Central monitors emission data, verifies compliance, and ensures that all purchases reflect the required carbon adjustments. This mechanism helps you avoid regulatory risks and gives you clear insight into your sustainability costs for each product and vendor.
Use the Extended Producer Responsibility (EPR) feature to track product materials and apply the right environmental fees to the items you produce or sell. Whether your products include packaging, electronics, or batteries, the system calculates fees for things like collection and recycling based on the material composition and their weights. To set up this feature, use the EPR Material Setup and Item Material Composition pages, along with extra fields on the Item Card page and sales documents. These tools help you comply with local regulations, improve cost accuracy, and support environmentally responsible product design and reporting.
Prerequisites
There are a few things to set up before you start using CBAM or EPR.
For CBAM, set up the following elements:
For EPR, set up the following elements:
Built on excise taxes framework
Both the CBAM and EPR features use the Excise Taxes framework to enable the necessary calculations. However, these features don't support all documents that some authorities require.
Set up CBAM
The following sections describe the setups that must be in place to use the CBAM features, and how to calculate CBAM entries.
Set up carbon pricing
- On the Carbon Pricing page, in Country/Region of Origin field, specify a country/region that is outside the EU from which you import goods. Create a new line for each country/region.
- In the Starting Date and Ending Date fields, enter the first and last date of the period for which you want to specify carbon prices.
- In the Unit of Measure Code field, specify the measure to which the carbon price applies.
- In the Threshold Quantity field, the minimum quantity for which you report carbon prices. Quantities below this threshold aren't included in the report.
- In the Rounding Type field, specify how you want to round integers to the nearest whole number.
Set up items for CBAM
Open the Item Card page for an item, and expand the Sustainability FastTab
In the Default Sust. Account field, select the general ledger account to which you post sustainability values.
In the Default CO2e for CO2 Emissions, Default CO2e for CH4 Emissions, and Default CO2e for N20 Emissions fields, specify the minimum amounts to use for each gas.
Note
You can specify values for each type of gas, but only CO2 is required.
In the Source of Emission Data field, specify where your data is verified.
To specify that your emissions data is verified, turn on the Emissions Verified toggle.
To specify that your emissions data is compliant, turn on the CBAM Compliance toggle. Calculation includes only items that are CBAM compliant.
Post your CBAM entries
Open the Purchase Invoice page for a purchase invoice.
For each relevant line, choose the Emissions Verified and CBAM Compliant checkboxes.
Post the document.
Open the Excise Journal page.
In the Journal Batch Name field, select the batch that you created for CBAM.
To create lines in the journal, choose the Calculate action, and then confirm.
Tip
To determine the country/region of origin, Business Central uses the value from the item first. If one isn't specified for the item, it uses the value from the vendor.
Choose the Register action, and then confirm.
Tip
After you register your CBAM entries, you can use the Excise Taxes Transaction Logs page to review them. You can export the list for reporting.
Set up EPR and its calculation
The following sections describe the setups that must be in place to use the EPR features, and how to calculate EPR entries.
Set up EPR materials
The setup for EPR materials is simple. On the EPR Materials page, create a new line for each type of material. Specify a unit of measure for each material, and the EPR fee rate that you use for that measure of the material. Finally, specify the date from which the rate is effective.
Set up item material composition for an item for EPR
Material composition is similar to a bill of materials. It's a list of the materials that make up an item, the weights of the materials, and the collection fee to charge for each material. Business Central uses this information to calculate EPR fees.
Open the Item Card page for a relevant item.
In the EPR Category field, select an EPR category.
Note
EPR categories are predefined, and might not apply to all items.
In the Material Composition No. field, select the drop-down, and then choose +New.
On the Item Material Composition page, on the General FastTab, enter information about the item.
On the Lines FastTab, in the Material Type No. field, select a material.
In the Weight field, specify the weight of the material in the unit of measure you specify in the next step.
In the Unit of Measure Code field, specify the measure you use for the material.
In the EPR Fee Rate field, specify the fee you charge for the material in the unit of measure.
Optional: You can also specify other fees for collection, sorting, administration, and environmental.
In the Status field, select Certified, and then choose OK.
On the Item Card page, on the Sustainability FastTab, the following fields show the calculated values for the item:
- Material Composition No.
- Total EPR Weight
- EPR Fees Per Unit
Optional: If you must report your method of disposal for the item, enter a short description of 50 characters or less in the End-of-Life Disposal Requirement field.
Post your EPR entries
Open the Sales Invoice page for a relevant invoice.
Business Central automatically fills in the Total EPR Fee on sales invoice lines that contain the item.
Post the invoice.
-
- Open the Excise Journal page.
In the Journal Batch Name field, select the batch that you created for EPR.
To create lines in the journal, choose the Calculate action, and then confirm.
Choose the Register action, and then confirm.
Tip
After you register your EPR entries, you can use the Excise Taxes Transaction Logs page to review them. You can export the list for reporting.
Related information
Sustainability management overview