Knowledge base · 03-regulations-overview

03 - Regulations: the landscape

Status. Draft v0.1 · First draft: 17-03-2026 · Pre-discussion.

Why this matters. Carbon accounting has tipped from voluntary disclosure into binding regulation over the last five years. The list of regimes a global manufacturer must track in 2026 is longer than it was in 2020, more fragmented across jurisdictions, and accelerating. For an internal team, the practical answer to “which regulations matter?” depends on (a) where a Tenant operates, (b) where they sell, (c) where they raise capital, and (d) whether their buyers face downstream disclosure requirements. This doc is a structured map of the regimes that show up most often in those conversations, in roughly priority order for the steel-and-CBAM-shaped corner of the world the platform is starting in.

CBAM is heavy enough to need its own doc - see 03a - CBAM, in depth. Everything else gets a tight one-section summary here.

How to navigate this doc

The regimes fall into three categories that behave differently and serve different functions in a carbon claim:

Methodological frameworks (§1). Voluntary, technical, define how you count. GHG Protocol, ISO 14064/14067, EN 15804. These are the bedrock; every binding regime below cites them.
Binding regulatory regimes (§2). Backed by force of law in their jurisdiction. CBAM, EU ETS, CSRD, ISSB-adopting jurisdictions, California SB 253/261, India CCTS. Different mechanisms (border tariff, cap-and-trade, mandatory disclosure, mandatory disclosure with assurance), all consequential.
Voluntary commitments that act like binding (§3). SBTi, CDP. Technically opt-in, but if your investors or customers expect them, they are effectively mandatory.

A Tenant needs to know which of these touches its operation. The platform is designed to produce the canonical numbers each of them needs, from the same underlying data, expressed under the relevant boundary.

§1 - Methodological frameworks (voluntary, technical)

1.1 GHG Protocol

The de-facto global framework for corporate and product carbon accounting, maintained by the World Resources Institute and World Business Council for Sustainable Development. Three documents matter most:

Corporate Accounting and Reporting Standard (2004) - defines Scope 1, 2, 3 for organisational inventories. The foundation every other regime cites. ¹
Scope 2 Guidance (2015) - defines the dual-reporting requirement (location-based + market-based) and the Quality Criteria for contractual instruments. Currently in public consultation; revisions expected to take effect 2027, with hourly-matching the headline proposed change. ²
Product Life Cycle Accounting and Reporting Standard (2011) - the product-level analogue, underlying Product Carbon Footprints (PCFs) and most EPD methodologies. ³

Why it matters to us. Every Tenant claim cites GHG Protocol somewhere. Every Carbon Engine boundary descriptor maps to a GHG-Protocol-compatible specification. The 2024–2026 Scope 2 revision is a known unknown the platform’s evidence model is already shaped to absorb.

1.2 ISO 14064, 14065, 14067

The ISO family covering greenhouse-gas accounting, verification, and product carbon footprints:

ISO 14064-1:2018 - organisation-level GHG inventory specification, broadly aligned with GHG Protocol Corporate Standard.
ISO 14064-2:2019 - project-level GHG quantification (used for offset and reduction projects).
ISO 14064-3:2019 - verification and validation of GHG assertions. The procedural standard verifiers operate under.
ISO 14065:2020 - accreditation requirements for the verifier bodies themselves. This is the upstream standard that determines who is allowed to sign a VerificationStatement. ⁴
ISO 14067:2018 - product carbon footprint specification. The product-level analogue of 14064-1.

Why it matters to us. ISO 14065 is the upstream gate for verifier accreditation - including CBAM’s verifier accreditation regime. ISO 14067 is the methodological basis for product carbon footprints, including the per-lot PCFs the platform’s passport machinery is designed to produce.

1.3 EN 15804

The European product-EPD (Environmental Product Declaration) standard for construction products. EN 15804+A2 (2019) is the current core text, partitioning a product’s life cycle into modules A1–A3 (raw material extraction, transport, manufacturing), A4–A5 (transport and installation), B1–B7 (use), and C1–C4 (end-of-life), with optional D (benefits beyond the system boundary).

Why it matters to us. Steel sold into construction (most steel) commonly comes with an EN 15804 EPD. The cradle-to-gate carbon number the construction industry quotes is the A1+A2+A3 boundary in EN 15804 terms, which is what the Carbon Engine’s EPD_A1_A3 boundary kind produces. EPDs are typically third-party-verified under ISO 14025 procedures. The full EN 15804 module structure is covered in 02a - Boundaries §2.

§2 - Binding regulatory regimes

2.1 EU CBAM

The first binding regime that puts a carbon price on imports into the EU. Definitive period started 1 January 2026; first annual declaration due 30 September 2027; certificate purchases open 1 February 2027. Six sectors: iron and steel, cement, fertilisers, aluminium, hydrogen, electricity. Significantly simplified in October 2025 by the “Omnibus I” regulation. Downstream extension to ~180 products from 2028 proposed in December 2025.

Deep-dive: 03a - CBAM. Everything else in this doc is shorter.

2.2 EU ETS - the system CBAM mirrors

The EU’s Emissions Trading System. A cap-and-trade scheme covering ~10,000 installations across power, energy-intensive industry, and intra-EU aviation, plus (since 2024) maritime. Annual surrender of allowances against verified emissions. EU producers of steel, cement, fertilisers, aluminium, hydrogen, and electricity have been operating under EU ETS for years; CBAM is the mirror applied to importers, to prevent carbon leakage as ETS free allocation phases out. ⁵

Why it matters to us. EU-based steel mills are already EU ETS participants - they have CEMS, verified inventories, and IR 2018/2067 verifiers. Non-EU mills exporting into the EU now face an equivalent regime via CBAM, often without the measurement infrastructure their EU competitors have built up over 15+ years. The platform’s CEMS-to-mass-balance Carbon Engine and verifier-walkable audit chain are precisely the tooling a non-EU mill needs to compete with an EU mill on cost-of-carbon-data.

2.3 CSRD / ESRS

The EU’s Corporate Sustainability Reporting Directive requires in-scope companies to publish annual sustainability statements following the European Sustainability Reporting Standards (ESRS). Climate is covered by ESRS E1, which requires Scope 1, 2, and (where material) Scope 3 emissions disclosure. The directive entered force in 2024; “Omnibus I” (December 2025) revised the scope and timeline significantly. ⁶

Current (post-Omnibus) state, as of May 2026:

Wave 1 (formerly NFRD-subject companies): reporting on FY 2026 data in 2027.
Wave 2 (other large EU undertakings): delayed by two years; now first report FY 2027 data in 2028, likely under the Amended ESRS rather than the original 2023 set.
Thresholds raised: in-scope EU companies now need >1,000 employees AND >€450M turnover (was 250 employees). The “Omnibus I” cut the in-scope universe from ~50,000 to a much smaller set.
Scope 3 remains mandatory where material. Disclosure requires breakdown by category, methodology, emission factor sources, and primary-vs-secondary data split.
Limited assurance by independent assurance providers is required.

Why it matters to us. A CSRD-reporting Tenant’s Scope 3 disclosure is downstream of its suppliers’ Scope 1+2 data. Suppliers who can produce verified, machine-readable PCFs make their customers’ CSRD compliance easier - which becomes commercial leverage. The platform’s passport architecture is the technical answer.

2.4 ISSB IFRS S1 / S2

The International Sustainability Standards Board (under the IFRS Foundation) issued IFRS S1 (general sustainability disclosure) and IFRS S2 (climate-specific) in June 2023, aiming to become a global baseline analogous to IFRS financial standards. As of January 2026, 21+ jurisdictions have adopted ISSB standards on a voluntary or mandatory basis. ⁷

Mandatory adopters with 2025–2026 first-reporting dates include: Hong Kong (Aug 2025), Pakistan (Jul 2025 for large listed), Chile (Jan 2026), Qatar (Jan 2026), Mexico (Jan 2026). Australia, Singapore, Japan, Malaysia, Brazil, and others have firm or near-firm timelines.

Why it matters to us. ISSB is the convergence layer. A producer in (say) Japan reporting under IFRS S2 needs Scope 1+2 (mandatory) and Scope 3 (with one-year transition relief). The data shapes are similar enough to CSRD and California that a Tenant can produce one canonical inventory and slice it by regime - exactly the Carbon Engine’s boundary-as-input design.

2.5 California SB 253 + SB 261

California’s two climate-disclosure statutes, signed October 2023, with rules implemented by the California Air Resources Board (CARB). They apply to companies doing business in California above turnover thresholds, regardless of headquarters location. ⁸

SB 253 - Climate Corporate Data Accountability Act. US-based companies with >$1B annual revenue doing business in California must report Scope 1+2 emissions starting 2026 (first deadline 10 August 2026, covering FY 2025 data) and Scope 3 from 2027. Limited assurance required for Scope 1+2; reasonable assurance from 2030.
SB 261 - Climate-Related Financial Risk Act. Companies with >$500M annual revenue doing business in California must publish biennial climate-related financial risk disclosures aligned with TCFD (or successor, i.e., IFRS S2). Statutory deadline was 1 January 2026; CARB has paused SB 261 enforcement pending a Ninth Circuit injunction; SB 253 is unaffected and remains fully in force.

Why it matters to us. “Doing business in California” captures a large set of global companies, including foreign producers selling into California. SB 253 is the first US-side mandatory Scope 3 disclosure regime with assurance. A CARB-acceptable Scope 1+2 is functionally a GHG-Protocol-compatible verified inventory - the same artefact CBAM, CSRD, and ISSB also accept.

2.6 US SEC Climate Rule - status note

The US SEC adopted a climate-disclosure rule in March 2024, then stayed it pending litigation. The rule’s future under the current US administration is uncertain; California’s SB 253/261 has effectively filled the federal vacuum for large US companies. We are tracking but not designing against the SEC rule today.

2.7 India CCTS

The Indian Carbon Credit Trading Scheme, notified June 2023, is India’s domestic cap-and-trade analogue, transitioning from the older PAT (Perform-Achieve-Trade) scheme. Targets are intensity-based: tonnes of CO₂e per unit of product. ⁹

Current state, as of May 2026:

Nine sectors notified for gradual inclusion: aluminium, chlor-alkali, cement, fertilisers, iron & steel, pulp & paper, petrochemicals, petroleum refining, textiles.
First seven sectors with notified emission-intensity targets are operating under binding obligations for compliance years FY 2026 and FY 2027, with FY 2024 as baseline.
First Carbon Credit Certificate (CCC) trading expected mid-2026.

Why it matters to us. Iron and steel is in scope. Indian steel mills face both a domestic carbon obligation (CCTS) and CBAM if they export to the EU. The CBAM carbon-price-deduction mechanism (Article 9 in 2023/956 as amended) is the bridge: an Indian mill can deduct verifiable CCTS carbon prices paid against CBAM certificate obligations. The platform’s evidence-and-provenance discipline makes the deduction defensible.

§3 - Voluntary commitments that act like binding

3.1 SBTi (Science Based Targets initiative)

A voluntary corporate-target-setting framework that validates whether a company’s emission-reduction commitments are aligned with limiting warming to 1.5°C. Operates under detailed sector and cross-sector criteria, with mandatory Scope 3 target-setting for companies whose Scope 3 is >40% of total. Used by >7,000 companies as of 2025. ¹⁰

Why it matters to us. Most Tenants the platform engages with have SBTi-validated or in-progress targets, because their customers and investors expect it. SBTi requires a credible inventory baseline and credible reduction projects - both of which are first-class concepts in the Stewardship Loop (see 08b §3).

3.2 CDP (formerly Carbon Disclosure Project)

A disclosure platform used by 23,000+ companies as of 2024, with questionnaires for climate, water, forests, biodiversity, and plastics. Investor-driven; many large investors require CDP-aligned reporting from portfolio companies. CDP-aligned reporting maps onto GHG Protocol, ISSB, and CSRD without major divergence.

Why it matters to us. CDP is often the first external-disclosure pressure a mid-sized industrial company faces, ahead of formal regulation. The data shapes CDP wants are a subset of what the platform produces for any of the binding regimes.

§4 - How these compose for a typical Tenant

A worked example. Consider a hypothetical hot-rolled coil producer in India exporting 200 kt/yr to the EU and 50 kt/yr to the US (California-active customer base).

What they face, simultaneously:

Regime	Obligation
India CCTS	Intensity target on FY 2026 and FY 2027 emissions; verified annual inventory; CCC purchase/surrender.
CBAM (importer-side, but their data is the input)	EU importer needs verified installation-period SEE from this mill, attested by an EU-NAB-accredited verifier, by 30 September 2027.
CSRD (Wave 1 EU customer)	EU customer’s Scope 3 includes this mill’s emissions; needs a PCF or installation-level SEE; strongly prefers verified.
California SB 253 (US customer)	US customer’s Scope 3 includes this mill from 2027; reasonable-assurance from 2030.
SBTi (US/EU customer with validated 1.5°C target)	Customer’s supplier-engagement commitment requires this mill to set its own SBTi-aligned target or be replaced.
GHG Protocol, ISO 14064/14067, EN 15804	Underlying methodologies for all of the above.

The mill produces one canonical inventory under one boundary set in the Carbon Engine, with full evidence and verifier-walkable provenance, and exports it under several regime-specific projections (a CBAM Communication, a CSRD-compatible PCF, a CARB-acceptable Scope 1+2, a CDP questionnaire, an EN 15804 EPD). That is the platform’s load-bearing product claim. Doc 06 - The Carbon Engine shows how the engine’s boundary-as-input design makes this possible without recomputing.

03 - Regulations: the landscape

How to navigate this doc

§1 - Methodological frameworks (voluntary, technical)

1.1 GHG Protocol

1.2 ISO 14064, 14065, 14067

1.3 EN 15804

§2 - Binding regulatory regimes

2.1 EU CBAM

2.2 EU ETS - the system CBAM mirrors

2.3 CSRD / ESRS

2.4 ISSB IFRS S1 / S2

2.5 California SB 253 + SB 261

2.6 US SEC Climate Rule - status note

2.7 India CCTS

§3 - Voluntary commitments that act like binding

3.1 SBTi (Science Based Targets initiative)

3.2 CDP (formerly Carbon Disclosure Project)

§4 - How these compose for a typical Tenant

References & further reading

Methodological frameworks

Binding regimes

Voluntary frameworks

Further reading

03 - Regulations: the landscape

How to navigate this doc

§1 - Methodological frameworks (voluntary, technical)

1.1 GHG Protocol

1.2 ISO 14064, 14065, 14067

1.3 EN 15804

§2 - Binding regulatory regimes

2.1 EU CBAM

2.2 EU ETS - the system CBAM mirrors

2.3 CSRD / ESRS

2.4 ISSB IFRS S1 / S2

2.5 California SB 253 + SB 261

2.6 US SEC Climate Rule - status note

2.7 India CCTS

§3 - Voluntary commitments that act like binding

3.1 SBTi (Science Based Targets initiative)

3.2 CDP (formerly Carbon Disclosure Project)

§4 - How these compose for a typical Tenant

References & further reading

Methodological frameworks

Binding regimes

Voluntary frameworks

Further reading

Footnotes