Expert panel launches plan for product carbon ledgers to make carbon performance visible

The same tonne of steel can have a very different carbon footprint depending on how it’s made. Measuring emissions at the steel plant is well understood, yet keeping track of the emissions once a sheet of steel makes its way into a car is not. Its figure is usually swapped for an industry average and by the time the car is finished, it is unclear how much carbon went into making it. The same goes for cement, fertiliser and most goods that pass through several hands.

Why does this matter now?

Costs are starting to build up. Since January, the European Union’s Carbon Border Adjustment Mechanism (CBAM) has charged importers of steel, cement, aluminium, fertiliser and hydrogen for the carbon embedded in their goods. Certificates covering the emissions of 2026 imports go on sale inFebruary 2027 and Britain’s version starts in January. Other governments are writing carbon limits into public tenders. All of these rules depend on a number that is hard to produce consistently and harder still to trace beyond the factory gate. For exporters, procurement teams and anyone selling into Europe, that number translates into the cost of doing business.

And the stakes go well beyond compliance. Corporate value chains account for the vast majority of the world’s greenhouse gas emissions, according to the Intergovernmental Panel on Climate Change (IPCC), much of it in materials such as steel and cement and services such as electricity and transportation that disappear into other products. If their carbon can be followed into the finished car or building, buyers can choose the option with lower emissions, regulators can reward it and producers have a reason to cut emissions. If it cannot, a tonne of steel made with lower emissions looks the same as any other.

The Technical Expert Panel on Carbon Accounting, convened by ICC and Carbon Measures is working on the TEP Carbon Accounting Framework, a common set of rules for recording the emissions behind a product and passing that record along with the goods. This would give buyers and policymakers a clearer basis for distinguishing products made with lower emissions from those made with higher emissions.

Amy Brachio, co-chair of the technical expert panel and CEO of Carbon Measures, recounts the story of a manufacturer who reports a different footprint for the same product, from the same factory to each of their big customers in a recent episode of ICC’s Trading Thoughts podcast. The trouble, she explains, is not that the figures differ – customs, a carmaker and an environmental product declaration (EPD) may, reasonably, want slightly different figures. It is that each figure is worked out from scratch, with different underlying data and no shared record of how it was reached, meaning none can be checked against the others. This leads many firms to fall back on industry averages, which reward nobody for doing better – effectively disincentivising sourcing inputs from choosing more carbon efficient producers.

The Carbon Accounting Landscape Review, aimed at informing the TEP’s ongoing and future work, recognises the value of existing life-cycle methods, sector guidance and data-exchange systems, but identifies challenges in comparing product-level results and in attributing, transferring and reconciling emissions across value chains. It highlights that what is missing is a mechanism that harmonises approaches to the level that drives comparability across products and allows embedded-emissions data to pass consistently along the value chain.

How would carbon accounting work?

The Technical Expert Panel on Carbon Accounting wants carbon treated similarly to how the financial accounting system treats the flow of inventories in value chains. Each company would record the emissions from its own operations, add those that arrive with its purchases, allocate the total to the products it makes and pass the figure on when they are sold. Add up the ledgers along a supply chain and they should reconcile, as financial accounts do. The framework operates within an ecosystem of three connected layers: data and quantification establish emissions quantities; accounting rules and systems organise their recognition, allocation, transfer and reconciliation; and applications use the records for procurement, regulation, disclosure, product declarations and investment. Its added value is that it provides a record that can be reused for different purposes, with adjustments that can be traced and checked. It would complement existing measurement and reporting approaches, not replace them.

What does it mean for business?

Critically, the framework is meant to complement existing reporting standards such as the GHG Protocol – which most firms use to report their emissions – and the environmental product declarations (EPDs) on which builders rely, feeding them better data from the same books. Karthik Ramanna, professor at Oxford University’s Blavatnik School of Government and co-chair of the panel, argues that the bigger payoff is in decisions. Good accounts, he said help companies “make choices in the way they source their inputs, in the way they design their operations and in the way they deliver their products to their customers.” A purchasing manager who inherits a supplier’s emissions on their own books likewise has a reason to seek efficiencies.

In practice, a shared carbon ledger would mean:

• Smart procurement: more carbon-efficient inputs show up in a company’s own numbers, so choosing carbon-efficient suppliers pays off.
• One set of books: a single record supports what customers, customs and product declarations each seek.
• Numbers that can be checked: figures reconcile with suppliers’ records and can be checked by auditors, as financial accounts are.
• High-quality reporting: the framework feeds existing standards such as the GHG Protocol and EPDs.

The purpose of this bookkeeping is to provide information that can lead to lower emissions. Better distinguishing products by making their carbon footprint visible would help buyers choose lower-emission options and allow policymakers to recognise them. Once producers can show their production is more carbon-efficient, the market can reward them for it.

“Good accounts help companies make choices in the way they source their inputs, in the way they design their operations and in the way they deliver their products to their customers.”

Karthik Ramanna, co-chair of the Technical Expert Panel on Carbon Accounting

What is still open?

Some challenging questions remain – and that is where the panel wants to help. Allocation of emissions across co-products is one such area. The accounting for  biogenic carbon (carbon from plants and other living sources), emissions in electricity and carbon removals also raise technical questions that must be addressed in a cost-effective manner. Phase-in rules also need to be introduced so that smaller producers, particularly in emerging economies, can still innovate and compete. The panel will continue to seek input from governments, standard-setters and companies, including at COP31 in Antalya and beyond.

What happens next and how to contribute

The panel plans to build the framework with three complementary pillars, moving from shared concepts to accounting requirements and practical implementation:

• Conceptual framework Establishes the foundation upon which the accounting requirements are developed and assessed, setting out its purpose, scope and relationships with existing standards, and the guiding principles, will be published for public comment in December 2026.
• Accounting rules  (How emissions are recorded, allocated to products, passed between companies and checked by auditors), including ledger design and responsibility; units and boundaries; recognition and measurement; allocation; transfer and reconciliation; removals; and verification and assurance. Selected chapters are expected to be published for consultation in the first quarter of 2027.
• Implementation Applying the rules across supply chains and making them manageable for smaller suppliers, including digital requirements, integration and adoption, and ongoing development across supply chains, including proportionate arrangements for smaller suppliers. Work continues in parallel; publication timing is to be confirmed as the accounting work progresses.

Double-entry bookkeeping enables robust financial reporting. The mission of the Technical Expert Panel on Carbon Accounting is to do the same for carbon – making the lower-carbon tonne of steel finally visible in the car it becomes, so that economic growth and lower emissions can pull in the same direction.

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