Sustainability in the Supply Chain: Scope 3 Emissions, CBAM, and Their Effects on Planning

In brief: European customers requesting product-level emissions data from their suppliers is an increasingly common practice. In most manufacturing and trading companies, a significant share of carbon emissions arises in the supply chain, outside the facilities the company directly controls. The European Union's Carbon Border Adjustment Mechanism (CBAM) entered its definitive period in 2026; in Türkiye, the Climate Law and the Emissions Trading System regulation are also in force. This article covers how Scope 3 emissions relate to planning decisions and the data requests awaiting companies that export to Europe. For the general framework, the What Is Supply Chain Management? page is recommended as a starting point.

What Are Scope 1, 2, and 3 Emissions?

The GHG Protocol divides Scope 3 into 15 categories. Not all of these categories concern the planning function to the same extent; those most directly related to planning and supply chain decisions are given below:

• Category 1 - Purchased goods and services: Raw material and material selection, supplier selection.
• Category 4 - Upstream transportation and distribution: Transport from supplier to factory and between warehouses; transport mode and vehicle fill.
• Category 5 - Waste generated in operations: Scrap, destroyed and expired products.
• Category 9 - Downstream transportation and distribution: Delivery to the customer, distribution network design.
• Category 12 - End-of-life treatment of sold products: Disposal or recycling of packaging and the product.

What Awaits Exporters to Europe? CBAM

CBAM works as follows: when cement, iron and steel, aluminum, fertilizer, hydrogen, and electricity products are imported into the EU, the "embedded" emissions generated during their production are declared and certificates are acquired in return. During the 2023-2025 transition period only reporting was done; the definitive period started as of January 1, 2026. With the simplification in 2025, importers importing less than 50 tonnes in total per year of goods covered by CBAM were exempted. The sale of certificates for 2026 imports will begin in February 2027. The deadline for the annual declaration and certificate surrender is 30 September of the year following the import.

For Turkish exporters, this means customers in the EU requesting verifiable emissions data at the product and facility level. If data cannot be provided, default values may be used in the declaration; however, these values often do not reflect the supplier's actual performance. For this reason, emissions per product are turning into a competitive factor that is evaluated together with price and lead time and enters the customer's total cost of ownership.

CSRD Scope Has Narrowed: What Does It Mean for Suppliers?

The EU's "Omnibus I" regulation (Directive (EU) 2026/470) entered into force on March 18, 2026. Accordingly, mandatory sustainability reporting (CSRD) is now limited to companies with more than 1,000 employees on average and net turnover above 450 million euros. The provision that directly concerns suppliers is the value chain cap. Companies with fewer than 1,000 employees have gained the right to refuse information requests from their reporting customers that go beyond the voluntary standard. The corporate sustainability due diligence directive (CSDDD) has also been narrowed to companies with more than 5,000 employees and turnover above 1.5 billion euros.

This regulation does not mean that data requests will end. Large European customers continue to ask their suppliers for data for their own Scope 3 targets despite the legal limitation. For this reason, what is decisive for the supplier is less the legal obligation than whether the customer uses this data in supplier selection.

The Situation in Türkiye: Climate Law and Emissions Trading System

Climate Law No. 7552 was published in the Official Gazette on July 9, 2025; the Türkiye Emissions Trading System Regulation based on the law entered into force on August 27, 2026. Among facilities carrying out activities covered by the regulation, those whose annual emissions exceed 50,000 tonnes CO₂e are included in the system. Facilities below this threshold are also within scope with monitoring, reporting, and verification obligations. The details of the pilot period are determined by the Carbon Market Board.

Legislation is changing rapidly; this section is for general information and does not replace legal advice. It is recommended to check the current official texts before implementation.

How Does Sustainability Enter Planning Decisions?

A significant share of the levers in the table also reduce cost. Scrap and destroyed stock mean waste as well as emissions. However, there are also decisions where cost and emissions conflict; a slower but lower-emission transport mode is a typical example. In such cases, adding an internal carbon price to S&OP scenarios can make the decision transparent to all parties.

Technology and Digitalization: Digital Management of Emissions Data

A CBAM declaration and a Scope 3 report require emissions data at the product, supplier, and shipment level. Compiling this data manually at the end of the period increases the risk of error and prevents the data from reaching planning decisions in time. The main contribution of digitalization in this area is to turn emissions from a reporting subject into a planning input.

Enterprise Resource Planning (ERP) is the enterprise transaction system that records orders, inventory, purchasing, production, and finance transactions in a common database; it is the master data and transaction source for planning. Purchasing, material movement, and shipment records provide the activity data for emissions calculation; first spend-based calculations are made with this data.

Internet of Things (IoT) is the infrastructure in which sensors on machines, vehicles, warehouses, and products transmit data automatically over a network; location, temperature, status, and consumption data are collected without human input. Energy meters and vehicle telematics provide measured consumption data instead of estimated coefficients; thus, the accuracy of facility and transport emissions increases.

Transportation Management System (TMS) is a system that supports shipment planning, vehicle loading, routing, and carrier management. It calculates emissions by transport mode, route, and fill, making carbon visible alongside cost in logistics decisions.

Artificial Intelligence (AI) and Machine Learning (ML) are methods that learn patterns from data to produce forecasts, classifications, and recommendations; machine learning is the sub-field of artificial intelligence that learns from data. They flag missing or inconsistent data in supplier declarations and speed up extracting data from documents and invoices. The assumptions behind completed values must be documented.

Advanced Planning and Scheduling (APS) is a planning system based on optimization and heuristic methods that produces feasible plans and schedules by considering capacity, material, and priority constraints at the same time. It adds carbon to the planning model as a cost or constraint, showing the cost-emissions balance together in supplier and production location decisions.

Digital Twin is a virtual model of a factory, line, or supply network that is updated with data; it allows scenarios to be tested without affecting the physical system. In network design scenarios, it makes it possible to test in advance the emissions effect of changes in location, transport mode, and supplier.

The most important contribution of artificial intelligence in the field of sustainability data is that it eases the burden of data collection and verification. However, the source and calculation method of every value used in a regulatory declaration must be traceable. For this reason, it is recommended that values estimated by the model be kept separate in reports from measured or supplier-declared values.

Emissions data compiled at the end of the period is a report;
emissions data that is visible at the time of planning turns into a decision.

Where Should You Start?

• 1. Find the hotspots: First estimate Scope 3 with a spend-based approach; identify the material groups with high spend and emission intensity.
• 2. Move to primary data: Collect product-level emissions data from the largest suppliers; record the source and verification status of the data.
• 3. Add it to master data: For products covered by CBAM, make product- and facility-level emissions values part of the material master data.
• 4. Link it to decisions: Add emissions as a parameter to supplier selection, transport mode decisions, and S&OP scenarios.
• 5. Set targets and monitor: Include emissions per product and scrap/destruction rates among the regular performance indicators.

Sustainability in the supply chain should be considered not as a separate project but as
a new parameter added to planning decisions.

Related Articles

• Total Cost of Ownership (TCO) in Purchasing: Supplier Selection and Green Procurement
• Campaign Planning and Changeover Times in the Process Industry
• Which Decision in Which Meeting in the S&OP Cycle? Calendar, Decision Logic, and Scenarios

Frequently Asked Questions

Which products does CBAM cover?

Cement, iron and steel, aluminum, fertilizer, hydrogen, and electricity, along with some products made from them, are covered. Whether a product is within scope is determined by its customs tariff position; the list must be checked against this position.

I am an SME supplier; my customer is asking for emissions data. Do I have to provide it?

There is no legal obligation to respond to every request. With Omnibus I, companies with fewer than 1,000 employees have the right to refuse requests from customers within CSRD scope that go beyond the voluntary standard. The commercial side of the issue is different. For products covered by CBAM, the importer needs actual emissions data for its declaration, and customers may use this data in supplier selection. For this reason, preparing the data in many cases becomes a de facto necessity.

Where should the Scope 3 calculation start?

Break purchasing spend down into material groups and make a rough first estimate with spend-based emission factors. This approach reveals the largest hotspots in a short time. It is then recommended to move to collecting primary data from suppliers in these groups.

Don't sustainability targets increase cost?

In some decisions they may. However, in items such as scrap, destroyed stock, empty transport, and unnecessary urgent shipments, reducing emissions also reduces cost. Planning improvements usually start with these items.

Are sensors and artificial intelligence necessary for the Scope 3 calculation?

Not to begin with. Work can start with a spend-based approach using purchasing data in the ERP. As measurement (IoT) and supplier-specific data increase, the accuracy of the calculation also increases. Artificial intelligence helps in completing missing data and processing documents; however, document the assumptions and report them separately from measured data.

References

• WRI / WBCSD (2011). GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
• European Parliament and Council. Regulation (EU) 2023/956 establishing a Carbon Border Adjustment Mechanism, and the 2025 simplification amendment.
• European Parliament and Council. Directive (EU) 2026/470 (Omnibus I), amendments to CSRD and CSDDD.
• Climate Law No. 7552, Official Gazette, July 9, 2025, Issue 32951.
• Türkiye Emissions Trading System Regulation, Official Gazette, August 27, 2026, Issue 33353.

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