If you’ve been following the news out of Brussels, you’ve seen the headlines: in early 2026 the EU finalized its “simplification” of major climate reporting rules, sharply cutting the number of companies in scope for CSRD. And in the U.S., the SEC has proposed to rescind its 2024 climate disclosure rules, which were stayed before they ever took effect, and the EPA has proposed eliminating 46 source categories under its Greenhouse Gas Reporting Program.
But the pressure to report hasn’t gone away. Instead, it’s shifted toward customer demands, investor expectations, U.S. state laws and the accelerating global adoption of international disclosure standards. Indeed, dozens of countries have introduced or are actively developing climate disclosure and emissions compliance requirements, and the list is growing.
Not to mention:
- The EU is still charging a carbon border tax on imports.
- Customers are asking suppliers for product-level emissions data regardless of what Brussels decides.
- Investors are demanding climate disclosures that meet international accounting standards.
- Even as U.S. regulations face proposed elimination, state-level mandates are stepping up to fill the gap.
For global manufacturers with complex supply chains, the compliance picture has only gotten more complicated.
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What Global Manufacturers Need to Know About ESG Reporting in 2026
Most manufacturers are aware of one or two programs on the radar. Maybe you’ve seen the headlines about the EU carbon border adjustment, or a customer has sent a CDP questionnaire. What’s harder to see is how many distinct programs are now converging at once — and how little overlap there is between them.
Consider what a mid-sized industrial manufacturer with U.S. operations and exports to Europe is actually looking at:
- EU CBAM requires importers to declare the embedded carbon in covered goods like steel, aluminum, cement and fertilizers, and to surrender certificates to cover it.
- EU ETS prices direct emissions from industrial facilities operating within the EU or EEA. Free allowances are declining.
- EU CSRD requires large companies doing business in Europe, now only those with more than 1,000 employees and €450 million in turnover, to report on climate impacts under the European Sustainability Reporting Standards, including Scope 3 value chain emissions.
- ISSB/IFRS S1 & S2, the international baseline for climate-related financial disclosure, has been adopted or is in adoption in more than 35 jurisdictions, including Japan, Brazil, Singapore and the U.K. That means your customers, investors and trading partners in those markets are already pulling climate data upstream.
- California SB 253 requires companies with over $1 billion in annual revenue doing business in California to disclose Scope 1 and 2 emissions beginning in 2026 and Scope 3 emissions starting in 2027. New York and other states are advancing similar legislation.
- CDP, SBTi and ISO 14067 aren’t government mandates, but they function like them when your largest customers require them.
These programs don’t substitute for each other. They stack. (Each is covered in detail in Carbon Compliance for Industrial Manufacturers: Programs, Penalties and Deadlines That Can’t Wait.)
It’s also worth naming what the EU Omnibus did and didn’t do. The Omnibus directive, adopted in February 2026 and in force since March, raised the CSRD threshold to companies with more than 1,000 employees and €450 million in turnover, up from 250 employees and €50 million. That takes an estimated 80 percent of previously in-scope companies out of mandatory CSRD reporting, with the changes applying to financial years starting in 2027. The relief is real, but it’s relief from one directive, not from the underlying obligation to account for emissions. CBAM was not simplified away. EU ETS obligations didn’t change. And a company that exports to Europe doesn’t get to opt out of its customers’ supply chain data requests just because it fell out of CSRD scope. The same data still has to be produced. It’s just being pulled by a different set of demands.
And as the U.S. federal government retreats from climate oversight, states are moving faster, not slower. The patchwork that American manufacturers once navigated at the international level is now playing out domestically as well.
GHG Compliance Requirements by Industry: Steel, Automotive, Chemicals
Like manufacturing itself, the compliance picture isn’t uniform. Which programs have the most immediate bite depends on what you make and where you sell it.
Steel and metals. EU ETS costs are directly tied to blast furnace and smelting emissions, and the free allowances manufacturers have relied on are shrinking on a scheduled timeline. CBAM adds a second layer: EU customers importing steel and aluminum must declare embedded emissions and surrender certificates. That data has to come from somewhere, which means it has to come from you. A steel producer that can’t provide verified product-level emissions data is a steel producer that loses EU contracts.
Automotive suppliers. The pressure here is coming from customers as much as from regulators. OEMs with science-based emissions targets (and many large ones now have them) are contractually or practically pushing those obligations down the supply chain. Tier-1 and tier-2 suppliers are receiving Scope 3 questionnaires, ISO 14067 product carbon footprint requests and SBTi supplier engagement asks. If your largest customer discloses under CSRD, your emissions are in their numbers.
Chemicals and industrial equipment. High Scope 1 emissions from process heat make EU ETS exposure significant. CBAM covers fertilizers crossing the EU border, a significant exposure for chemical producers. And companies with a global customer base are navigating data collection challenges across facilities, jurisdictions and reporting frameworks simultaneously.
The common thread here is that each of these programs needs data. Facility-level data. Product-level data. Verified data.
How to Prepare for GHG Compliance: First Steps for Manufacturers
The good news is that the data infrastructure these programs require overlaps significantly. The facility-level emissions data that feeds U.S. state reporting also feeds CBAM calculations. The GHG Protocol accounting that underpins a CDP response is the same foundation SBTi requires. Investments made now to create clean and transparent reporting can pay dividends across multiple programs.
Practically, that means your first steps are to:
- Identify which products are exported to the EU. (CBAM exposure starts here.)
- Map Scope 1 and 2 emissions by facility. (This is the foundation everything else builds on.)
- Assess which programs your largest customers are subject to. (Their reporting obligations will become your data requests.)
- Evaluate third-party verification readiness before a deadline forces the question.
- Start building the capability to calculate product-level embedded emissions for your highest-exposure product lines.
The programs described here are just the starting point. Each comes with its own applicability thresholds, phased timelines, verification requirements, noncompliance penalties and compliance costs — and on each of those, the details matter.
To help, Tracera has created Carbon Compliance for Industrial Manufacturers: Programs, Penalties and Deadlines That Can’t Wait. It’s a practical reference guide covering 13 major GHG reporting frameworks, plus a quick-reference matrix that puts every program side by side.
Download Your Guide to Carbon Emissions Reporting