As the world moves towards a low-carbon future, businesses in the metals and energy sectors are under increasing pressure to adapt. Carbon transparency is critical in this transition as it allows companies to track and report their carbon emissions across the entire supply chain. 

Beyond compliance, carbon transparency presents opportunities to gain a competitive edge. 

With regulatory demands and commercial expectations constantly changing, companies which act now to decarbonise their operations will be better positioned for future success. 

Trade Finance Global (TFG) spoke with Adam Hearne, CEO of CarbonChain, to learn more about how businesses can use carbon transparency to meet compliance requirements, decarbonise their supply chains, and capitalise on emerging commercial opportunities.

Carbon transparency and its growing importance

Carbon transparency refers to a business’s ability to track and understand its carbon emissions comprehensively, not just within its own operations but throughout the supply chain.

Hearne said, “Data is critical for decarbonisation and the macroeconomic opportunity that is the green transition. Companies that don’t have the right data risk non-compliance, huge fines, and also missing out on commercial opportunities.” 

In sectors like metals and energy, where the production process is resource-intensive and emissions-heavy, this is particularly crucial. Having access to accurate, shareable carbon data is no longer optional. It is becoming a necessity driven by regulators, investors, banks, and customers alike.

At the heart of carbon transparency is the ability to report emissions in a verifiable and standardised way. As carbon taxes and regulatory frameworks, such as the European Carbon Border Adjustment Mechanism (CBAM), come into full force, companies that fail to provide accurate carbon information risk hefty fines. 

But companies are starting to recognise that providing carbon data is not a cumbersome regulatory requirement, but rather opens the door to new commercial opportunities. For example, banks are now offering better credit terms, such as interest rate discounts, to businesses that can demonstrate lower carbon intensity in their supply chains. 

Challenges for traders in decarbonising supply chains

Despite the clear advantages of carbon transparency, many businesses, especially traders, face significant challenges when trying to decarbonise their supply chains. 

One of the most pressing issues is traceability. Supply chains in the metals and energy sectors are often multiple layers of suppliers, each with varying degrees of environmental oversight. Obtaining accurate carbon data from these suppliers is complicated.

Hearne said, “That makes your decarbonisation journey hard if you’re trying to look at where your supply chains are coming from. Now, imagine trying to get carbon information on top of that, and you’re facing an uphill battle. If you don’t have the right tools and experts around you, it’s actually really hard to get started.”

Another challenge is the hesitancy, especially among smaller companies, to ask their suppliers for carbon data. Larger companies with more influence in the market tend to make these requests early in their decarbonisation journey, using their buying power to enforce compliance. 

Hearne said, “Smaller companies delay the ask for fear of upsetting the status quo, not realising how rapidly the regulatory landscape is evolving and the significant fines that are getting imposed this year.”

However, this hesitancy can be detrimental. The regulatory landscape is evolving quickly, and companies that fail to act could be left behind as the market shifts toward low-carbon products.

Hearne added, “Carbon reporting is here to stay. It’s not just a fashion trend. So companies need to invest time and money, whether they like it or not. Starting now on your carbon footprint is the best way to overcome all of these challenges.” 

Commercial opportunities through carbon data

In addition to meeting compliance standards and avoiding regulatory penalties, carbon transparency offers businesses in the metals and energy sectors clear commercial benefits. 

One such opportunity is the ability to secure better terms on sustainability-linked loans. Financial institutions are increasingly offering lower interest rates to businesses that can provide verified carbon data and commit to reducing their emissions, which provides a tangible financial incentive for companies to invest in carbon reporting and emission reductions.

Hearne said, “Over 80% of your emissions are going to be in the supply chains of your business, so you need to tackle this bigger opportunity first.”

Moreover, as consumers become more environmentally conscious, there is a growing market for low-carbon products. In some cases, businesses are able to charge a green premium for products with a lower carbon footprint: buyers are willing to pay more for sustainability. 

Companies that can provide emissions data upfront, particularly at the quoting stage, stand to gain a competitive advantage by appealing to customers who prioritise sustainability in their purchasing decisions.

The supply chain itself presents another significant opportunity. By actively seeking suppliers with lower carbon intensity, businesses can reduce their own emissions while future-proofing themselves against the rising costs of carbon taxes. 

Companies that act early and lock in long-term agreements with low-carbon suppliers will be better positioned to capitalise on the economic benefits of decarbonisation, including cost savings and enhanced market competitiveness.

Case study: Fusina Rolled Products

Fusina Rolled Products, a market leader in aluminium rolling, is one example of a company actively

reducing its carbon footprint with CarbonChain’s solution by implementing sustainable practices throughout its production process. The company produces rolled aluminium with an impressively low carbon intensity.

Hearne said, “They’re able to offer products that are as low as three to four tons of carbon per ton of aluminium, which is impressive compared to the industry average of 16 tons per ton. 

By offering aluminium with a lower carbon intensity, the company can secure a green premium. As Hearne summarised, “They can get commercial benefits for acting early in markets that are showing demand for carbon transparency.”

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Carbon transparency is no longer just about meeting regulatory obligations—it is a strategic imperative. Companies that invest in tracking and reducing their carbon emissions today will stay compliant with ever-tightening regulations and unlock valuable commercial opportunities. 

The challenges of decarbonising supply chains are real, but they are surmountable with the right tools and a proactive approach. As the global economy shifts towards a low-carbon future, businesses that prioritise carbon transparency will be best positioned to thrive.