Time is running out for Europe’s automakers to prepare for the new carbon emissions rule. The EU automotive industry, which is responsible for 6% of total EU employment and 7% of EU gross domestic product (GDP), will be heavily impacted by the EU’s Carbon Border Adjustment Mechanism (CBAM).

The new regulation will require companies to account for carbon emissions on select imported products. For the auto industry, the steel and aluminum categories are especially critical.

Complete automobiles are not currently covered by CBAM, but the automotive sector is among the most exposed because of its dependence on emissions-intensive materials. Components such as body panels, chassis, frames, and battery enclosures rely heavily on imported steel and aluminum.

CBAM is currently in its transition phase and will enter the definitive phase on January 1, 2026, meaning that companies need to track their imported emissions on covered products throughout 2026 and begin purchasing certificates for those imported, tracked emissions in February 2027, with the first report due August 2027.

CBAM costs will add up quickly

The modern passenger vehicle contains around 1 tonne of steel and 200 kilograms of aluminum. Global averages hover around 1.9 tonnes of CO₂ emitted per tonne of manufactured steel, and each tonne of primary aluminum produces around 15 tonnes of CO₂.

With analysts projecting carbon ETS prices could reach €150 per tonne of CO₂ by 2030, a newly manufactured vehicle could soon be subject to €300 in CBAM certificate costs, assuming manufacturers import 20% of the necessary steel and 54% of the required aluminum, consistent with EU import data. Given that Germany produced 4 million cars in 2024, German automakers and component manufacturers could be on the hook for about €1.2 billion in CBAM certificate purchases in 2027.*

Looking past 2027, the European Commission plans to add categories like chemicals and plastics to the regulation, bringing more auto parts under the CBAM umbrella and making it even more important for European automakers and component manufacturers to solidify their CBAM strategies today.

CBAM preparations for automakers and component manufacturers

Across the EU automotive industry, companies seem insufficiently prepared for the new phase of CBAM.

This is not completely due to inaction by companies—EU regulators have not yet finalized details of the emissions value calculations methodology or how to verify data. That said, regulators already clarified the scope of companies that must report and the timelines to purchase certificates.

With this information, it’s now crunch time for European automakers and component manufacturers to get ready for the rules taking effect in January 2026. Here’s what they should prioritize.

1. Get familiar with CBAM and evaluate your process

The core elements of CBAM have been defined and companies must act now. If you haven’t done so yet, start by understanding the overall process and requirements.

If you are in scope—meaning you meet the de minimis threshold of either importing more than 50 tonnes of CBAM affected goods per year or 100 tonnes of embedded CO₂ annually—determine which parts of your supply chain are most affected. Identify your top suppliers and imported goods, develop a focused approach for obtaining actual emissions data from those suppliers, and assess the potential financial impact. As more materials come under the scope of CBAM, and as the carbon ETS prices rise, the financial impact will increase in the years ahead. Companies must prepare to meet these new obligations and manage this financial impact.

2. Collaborate with your suppliers

Identify and focus on your most critical suppliers—typically the top 50 to 100—and build a targeted engagement plan while defining an informed approach for the broader supplier base. Consider updating procurement terms to require future data sharing and provide support to suppliers in educating and calculating emissions where needed. Close collaboration will be essential to obtain actual emissions data to avoid the more expensive default values and identify decarbonization potentials. 

Accessing trusted supplier data is one of the biggest challenges facing companies today.

While the EU provides mechanisms for data exchange between suppliers and importers, Catena-X, an industry network for the European automotive sector, in combination with third-party data exchange software, offers an alternative to collecting trusted, standardized emissions data. Catena-X enables companies to collaborate and share data in a trusted environment. It brings together manufacturers, technology providers, and suppliers to standardize data sharing processes across the value chain. Beyond data exchange, these networks foster knowledge sharing, allowing members to learn best practices, align on standards, and accelerate compliance readiness collectively.

To participate, companies typically register with the network, adopt certified software that supports standardized data exchange, and begin collaborating with other members. This approach ensures interoperability and automates trusted emissions data collection. Catena-X is actively refining its scope and standards to support CBAM.

3. Find the right technology for your business

Most importantly, you want to find the right technology partner that will streamline CBAM reporting and support the integration of carbon into core financial accounting processes.

The EU CBAM report requires a lot of data, all of which can be requested, filled, and reported automatically using actual emissions values with tailored, ERP-based systems. The SAP Green Token solution can support CBAM declarant reporting by enabling standardized, auditable reporting workflows. The SAP Green Ledger solution will manage the certificate repository and help ensure financial and carbon accounting of CBAM emissions and certificates in alignment with accounting standards like US GAAP and IFRS (planned for H1 2026).

Manual processes, like e-mails and Excel files, are prone to error, do not scale, and will make CBAM compliance time-consuming and resource intensive.

Prepare your systems for CBAM compliance

CBAM is set to reshape material sourcing in the automotive industry by introducing carbon as a cost factor and driving transparency across global supply chains.

The ideal scenario for automakers and component manufacturers is to take decisive actions to decarbonize—such as sourcing low-emissions steel and aluminum, increasing circularity efforts, and optimizing product design to use less CBAM materials—while fully automating CBAM compliance.

Access to accurate data on supply chain emissions—and their financial implications—provides the insights that business leaders need to decarbonize and reduce risk in the years ahead.

The right combination of software tools and industry network collaboration can enable cost-optimized and automated CBAM compliance and deliver valuable supply chain intelligence. SAP Sustainability solutions can deliver measurable ROI by automating data collection and workflows and enabling finance teams to move beyond manual processes toward strategic analysis and action. This helps create a scalable foundation for ongoing carbon cost management while supporting standardized data exchange and collaboration across the value chain.

Start preparing now to ensure your business thrives as the 2026 CBAM definitive phase approaches.

Read the CBAM playbook and watch the CBAM webinar to learn more.

Thomas Janzen is an industry expert at SAP SE.

*This is a back of the napkin calculation to illustrate the potential impact. This is based on data that shows the EU imported 27.4 million tonnes of finished steel products in 2024. The EU consumed about 129 million tonnes. Therefore, we assume  imports account for roughly 20% of EU steel use. In 2023, 54% of the aluminum used in the EU came from imports. Using these averages means about 2 tonnes of imported CO2 per vehicle, or €300, assigning 20% of 1 tonne of steel emissions and 53% of 200kg of aluminum emissions.

WalkMe survey finds 78% use unapproved AI and only 7.5% receive extensive training, elevating governance and productivity risks for enterprises.

The AI revolution is transforming the workplace, but a new survey from WalkMe, an SAP company, reveals that employees are largely left to navigate it on their own.

While workers are eager to use AI, most lack the support and training needed to use it responsibly and effectively, fueling security risks, wasted productivity, and lost return on investment (ROI).

For enterprises, this problem is compounded by complex digital landscapes, where poor adoption of new tools can erode the value of strategic technology investments.

What the survey found

The second annual “AI in the Workplace Survey” polled 1,000 working U.S. adults who use AI in their jobs to understand the reality of AI adoption. The findings highlight a significant gap between employee eagerness and organizational readiness:

• Shadow AI is everywhere: 78% of employees admit to using AI tools that were not approved by their employer. More than half (51%) report receiving conflicting guidance on when and how to use AI at work.
• Productivity paradox: Despite 80% of employees believing AI improves productivity, nearly 60% admit it often takes longer to figure out how to use an AI tool than to complete the task without it.
• Training gap: The number of daily AI users increased by 16 points since last year’s survey, but only 7.5% of employees have received extensive AI training, an increase of only 0.5% since last year’s survey. Another 23% have received no training at all. 
• Cultural confusion: Almost half (45%) of workers admit to pretending to know how to use an AI tool in a meeting to avoid scrutiny, while 49% have hidden their use of AI to avoid judgment. This trend is even more pronounced among Gen Z, with 55.5% pretending to understand AI tools and 62% hiding their use.

The survey’s findings underscore a critical challenge for large organizations across industries. As AI capabilities are integrated into enterprise applications, ensuring employees can effectively and securely use these tools is paramount to realizing their full business value. Unmanaged AI adoption creates a governance crisis, where security and compliance risks can increase, and valuable productivity gains are lost.

WalkMe helps customers navigate this challenge. Our Digital Adoption Platform (DAP) acts as an essential guidance and governance layer, enabling employees to harness the full power of the technology tools at their disposal. The right digital adoption strategy can help businesses manage the risks of shadow AI while unlocking the full potential of their AI investments across complex landscapes.

WalkMe leadership and analyst commentary

“Beyond the productivity paradox, we’re facing a full-blown governance crisis,” said Dan Adika, CEO and co-founder of WalkMe. “When nearly 80% of employees are using shadow AI tools, organizations are not just losing money – they’re losing control. Businesses are missing a massive opportunity to strategically empower their people and realize the full potential of AI.”

“AI has become an essential enterprise skill. But without training and guardrails, shadow AI creates risk and undermines ROI,” said Gina Smith, PhD, research director of IT Skills for Digital Business at IDC. “The companies that build AI‑ready skills and digital adoption strategies now can avoid such loss. They are the organizations who will lead the next era of work.”

Methodology

Propeller Insights conducted the survey for WalkMe from July 16-23, 2025, polling 1,000 working U.S. adults who use AI on the job. The sample was balanced across age, gender, industry, company size, and seniority, with a ±3 percentage point margin of error. Because respondents were screened for AI use at work, the 100% adoption rate reflects the study design, not the broader U.S. workforce.

Learn more

• Learn more about WalkMe
• Read the 2025 State of Digital Adoption Report
• See last year’s AI in the Workplace Survey

Adriel Sanchez is chief marketing officer of WalkMe.

Consolidated Hospitality Supplies (CHS) is a leading distributor of operating supplies and equipment for the hospitality industry. Comprised of two brands — American Hotel Register and myAMTEX — it currently employs around 150 people. CHS caters to a wide range of hospitality organizations, from small hotels and large resorts to fitness centers and universities.

As CHS CEO Tom Lynch described it: “You walk into a hotel, you go to your room, you open the door — just about everything inside that room we sell to hotels.”

A decade ago, American Hotel Register (AHR) was a billion-dollar enterprise with global expansion plans, which led the company to adopt SAP S/4HANA. As strategic as this investment was for AHR, the system slowly began to transform into a heavily customized, complex, and expensive resource. 

“What happened was AHR took the best of SAP, then added the best of everything else,” explained Soumyo Mukherjee, director of IT at CHS.

While not necessarily the most efficient strategy, it worked well enough for AHR — until COVID-19.

The pandemic forced virtually all hospitality facilities to close, leaving AHR with millions in inventory and shrinking its revenue to under $200 million. In 2021, CHS acquired the American Hotel Brand and its IT assets.

Among other things, this necessitated a reduction in IT spending, all the while needing to stay resilient and ready to ramp operations back up in a post-pandemic world.

Forced into action, CHS began looking for a new approach, and found it with SAP and partner ASAR Digital.

Turning point for CHS and SAP

That approach was to adopt SAP Cloud ERP. 

At the very least, moving to SAP Cloud ERP would help CHS greatly streamline its IT landscape, eliminate complex customizations, simplify processes, and enable the organization to embrace the latest SAP innovations.

The pandemic highlighted the need for CHS to modernize its operations, maintain cost-efficiency, and position the company for future growth, which served as additional reasons for selecting SAP Cloud ERP.

“The cloud and innovative AI solutions could simplify business complexity and lower costs with the least amount of technology-heavy lifting for CHS associates,” noted Mukherjee.

CHS is now in the process of implementing SAP Cloud ERP, planning to go live late in 2025.

“Moving to a clean core will help CHS not only reduce costs and IT burdens, but also lay a strong foundation for leveraging next-generation AI and digital capabilities,” said Sanjjeev Singh, president and CEO of ASAR Digital. “Our partnership is all about turning challenges into opportunities for innovation and sustainable growth.”

AI use cases and innovation

CHS is also excited about the future of AI and latest SAP innovations, particularly around SAP Business AI. According to Mukherjee, “We are definitely looking to utilize as much AI capabilities as we can. In order to do that, we are trying to stick with the best practices of SAP, which is keeping the clean core principle, so that as AI evolves, as Joule evolves, we can make full use of that.”

Lynch further explained how CHS might be able to benefit from AI, saying, “Whether it relates to pricing, inventory management, timing of transportation — there are so many things that we could potentially benefit from. There’s tremendous opportunity to use our own data to be more powerful.”

By shedding complexity and embracing a clean core philosophy with SAP Cloud ERP, CHS is not just recovering; it is strategically rebuilding for a future that is leaner, smarter, and powered by innovation.

Eric van Rossum is CPO of Industries and Globalization and chief marketing officer for SAP Business Suite at SAP.

Based on a long-term relationship with SAP AppHaus Network partner Bluestonex, renowned luxury retailer the Watches of Switzerland Group moved to SAP Business Technology Platform (SAP BTP) in a partner-managed cloud approach to fully enable application development and digital innovation.

With the help of its trusted partner, the Watches of Switzerland Group also set up SAP Integration Suite within only two weeks, enabling the company to incorporate insurance offers in their processes.

The Watches of Switzerland Group is a leading luxury watch retailer with a reputation for quality and exclusivity. With operations spanning the UK, U.S., and parts of Europe, its portfolio of brands has been a trusted name in luxury timepieces for decades. As the company expands its business and adapts to new market dynamics, Watches of Switzerland Group is transforming its technology infrastructure to prioritize scalability, efficiency, and streamlined operations across its global presence.

The journey to SAP BTP as a partner-managed cloud model

At the beginning of the engagement, the English watch retailer relied on an enterprise architecture including legacy systems such as on-premise SAP ECC 6.0 systems and middleware built in-house. Limited IT resources made scaling difficult to meet business demands for faster project delivery and modern integrations.

After purchasing SAP BTP credits, the company faced internal skill gaps and competing priorities. Finally, the company wanted to adopt cloud-based technologies while remaining flexible about future ERP decisions, whether transitioning to SAP S/4HANA or exploring alternative platforms.

Partnering with Bluestonex

Watches of Switzerland partnered with Bluestonex and transitioned to a partner-managed cloud model – in this case SAP BTP. Under this model, Bluestonex took over responsibility for managing SAP BTP credits, resource allocation, and infrastructure support, allowing Watches of Switzerland Group to shift from an internal, self-managed approach to an expertly managed environment, always aligned with the retailer’s business objectives. Since moving to this model, Watches of Switzerland Group has:

• Increased SAP BTP value: Freed from managing credits and technical configurations, the customer team can focus on business-critical projects
• Streamlined SAP Fiori applications: All SAP Fiori apps have been successfully migrated to the cloud, enhancing performance and improving the user experience
• Strengthened IT resilience: With Bluestonex acting as a strategic partner, Watches of Switzerland has built a foundation to support future growth and innovation
• Future-proofed infrastructure: The agnostic capabilities of SAP BTP ensure that the integration framework remains relevant, regardless of the future ERP platform

Bluestonex Innovation Factory

With the foundational work completed, Watches of Switzerland decided to further expand its adoption of SAP BTP services, integrating more business processes and scaling globally. But what were the core business processes? Where was the room or even need for improvement to deliver best-in-class customer services, be successful overall, and remain on top of things in the luxury retail segment?

“The partnership with Bluestonex is not just about technology,” said Glenn Bamford, head of Business Systems at Watches of Switzerland Group. “They act as an extension of our team, bringing innovation and expertise that we lack internally. With their support, we’ve been able to make strategic moves towards modernizing our systems while remaining agile for the future.”

To understand business, user, and customer needs, thorough research can provide reliable answers and a solid foundation for innovation. So, along the human-centered approach to innovation, Bluestonex Innovation Factory team organized a user research journey visiting six representative Watches of Switzerland Group showrooms, shadowing employees and observing different processes in the context of purchasing, customer inquiries, deliveries, commissioning, and many more.

After visiting the different showrooms, one observation was that requirements could vary considerably from one to another, simply because of different locations and customer profiles. In some showrooms, it was mainly about selling middle-priced watches and attending several customers at a time; in others, it was about serving one customer with specific needs for a purchase of a very expensive and unique piece.

Incorporating insurance options with the help of SAP Integration Suite

Despite all the differences, there is one requirement the researchers observed, that spanned across all customer engagements. That is the wish for an appropriate insurance option for the purchased watch. The Watches of Switzerland Group and Bluestonex decided to realize this integration of an insurance option in its service processes through SAP Integration Suite.

In just two weeks, the insurance integration went live as scheduled, allowing the Watches of Switzerland Group to meet crucial business demands without sacrificing quality or functionality. With SAP Integration Suite, Watches of Switzerland Group is now positioned to continue modernizing its technology stack in alignment with its strategic vision. This scalable solution can evolve with their future needs, including a potential transition to SAP S/4HANA.

“This project demonstrates the value of Bluestonex as a strategic partner,” Bamford said. “Not only did they execute the integration under intense time pressure, but they also provided critical expertise. SAP Integration Suite, deployed with Bluestonex’s support, paves the way for greater flexibility and scalability as we move forward with our digital transformation.”

During the annual SAP BTP strategy day held in the Bluestonex AppHaus Shropshire, Watches of Switzerland Group identified concrete business objectives and how technology could be harnessed to accomplish these goals, both for them and for Bluestonex as its partner. With the proven hands-on methods to prioritize and align different solutions to these goals the joint team was able to map goals to short-term and medium-term actions.

Looking back, Bluestonex Commercial Director Richard Henry said: “Our partnership with Watches of Switzerland was born from our SAP AppHaus DNA, as well as the focus on providing value-driven user experience in SAP BTP applications. As a niche SAP partner, we could provide the right skill set, along a human-centered approach to innovation and support the Watches of Switzerland Group in its digital strategy with SAP.”

After realizing the value of SAP Integration Suite, Watches of Switzerland Group and Bluestonex are now looking for further integration projects right across the business. The group’s flexible and secure cloud-first approach enables it to adapt to changing markets and continue to deliver the best possible customer service.

The way ahead

One area where both teams are equally eager to progress is in artificial intelligence (AI). The Bluestonex team always looks for business use cases that could be improved with the help of SAP Business AI capabilities. Also, the Watches of Switzerland Group’s team is keen to understand how to unlock the use of AI in its organization. Bluestonex showcased several solutions, including its document processes application, which was developed as part of the Next Level Programme in just 10 days, as well as the integration of SAP’s generative AI copilot Joule for its flagship product Maextro, a data governance tool.

For all the opportunities SAP Business AI holds in stock, customer and partner are currently planning for a first SAP Business AI Explore workshop to identify use cases that could be improved with the help of AI. As said above, it is all about thorough research and a trustful collaboration to stay future-ready and a leader in luxury retail.

Imke Vierjahn is communications lead for SAP AppHaus Network.