2.3 Change operations to decarbonize – and engage stakeholders Companies can develop meaningful strategies to drive operational excellence while simultaneously reducing GHG emissions and BCA policy exposure. Achieving GHG emissions reductions within companies is the most impactful way to reduce exposure to carbon-pricing policies, including but not limited to BCAs. Companies should start by establishing a baseline with carbon accounting and setting ambitious targets via the GHG Protocol54 and Science Based Targets or similar methodologies. These targets should align with industry pathways and policy obligations, and be supported by an aligned business strategy. While companies can offset existing emissions with credits or implement CCUS, these are stopgap solutions. The following actions enable companies to reduce compliance obligations and gain competitive advantages by leveraging BCAs through robust decarbonization actions.2.2 Achieve domestic and international compliance Comprehensive domestic carbon pricing and BCA compliance strategies can help organizations meet policy obligations. Companies can comply with their national policy regimes by: –Monitoring regulatory status: Check regularly whether your company meets thresholds and coverage criteria in each jurisdiction –Establishing reporting systems, records management and disclosure procedures: Implement processes to disclose GHG emissions or energy usage reports according to prescribed methodologies for both domestic policies and BCAs; retain records and supporting documentation for required periods for internal compliance reviews or external verification/auditing –Managing compliance instruments: Receive and track allocated instruments and plan for timely compliance –Maintaining the registry and managing submissions: Enter validated data to registries for instrument tracking and compliance demonstration, and submit documentation and payments through designated channels –Building capacity and capabilities: Ensure that personnel understand requirements, prohibited activities and penalty structures, and track policy developments (e.g. a strategic foresight team) Climate and Competitiveness: Border Carbon Adjustments in Action 26

Climate and Competitiveness Border Carbon Adjustments in Action 2025