Duration: 27:56
People: Rich Dale and Rebecca Meadows
[0:02] Rich Dale: So I’m delighted to welcome Rebecca Meadows, who is the founder and MD of Nexus Earth Group, which is a sustainability consultancy focusing mainly on the manufacturing world. Welcome to Made To Grow, Rebecca.
[0:18] Rebecca Meadows: Thank you. Thank you for inviting me, Rich. It’s great to be involved.
[0:22] Rich Dale: Pleasure. Pleasure. So, could you give the listeners a wee bit more background about what you do before we sort of. Well, I should start by saying the topic of today’s conversation is broadly around CBAM and the nuances between UK and EU implementations. And the reason why we’re kicking off 2026 with this, as you’ll probably tell us more, is, you know, it’s now coming into effect. But just to give the listeners some context, could you just introduce yourself and the business?
[0:53] Rebecca Meadows: Yes, sure, absolutely. So, hello, everyone. I’m Rebecca, director of Nexus Earth. We are, as Rich says, a sustainability consultancy mainly focused on supporting SME manufacturers. And we support companies through energy procurement if they’re looking to reduce their energy, be more sustainable. We can help with that. We can help with reporting and regulations and framework. And obviously, we’re going to talk about CBOM today, so that is one framework that’s in place, and we can also help to access grants and funding where applicable, because we aim to leverage what support is already out there.
[1:37] Rebecca Meadows: You know, let’s not reinvent the wheel for SMEs, there’s. There’s enough to navigate, so there is support out there and we will help to connect you to that as well. So, yeah, and we also work with local authorities, so if it’s a specific program designed to help engineers, production, manufacturing, those sort of sectors, we can help support and deliver. And we’ve previously done that through one example with the UK Shared Prosperity Fund. We worked with Cheshire West, and that was a great program, 80 businesses involved.
[2:12] Rebecca Meadows: So, yeah, we’ve got a lot of fingers and a lot of pies.
[2:16] Rich Dale: Brilliant. It’s brilliant to be able to support the SME community both, you know, directly, but also through the. The kind of local community council, you know, enterprise agency, chambers kind of world, because, you know, that’s where a lot of SMEs go to, you know, for information. And also, I suppose in today’s. Today’s environment, you know, as an SME ourselves, you know, it’s. Is this another thing that I have to do that that isn’t actually involved in running the business and adding value to customers.
[2:54] Rich Dale: But I think there is a silver lining to this, certainly from an efficiency and cost point of view, never mind an environmental kind of an optimisation point of view. But could you just elaborate more on CBAM and what listeners need to know?
[3:16] Rebecca Meadows: Sure. So let’s start with some CBAM as, as an overview, like you said. So CBAM stands for the Carbon Border Adjustment Mechanism. Don’t say that too fast. As a tongue twister. So CBAM is essentially an environmental policy framework. It is currently live in the EU and will be coming into practice in the UK from January 2027. So that’s what I’m going to be talking about today. But essentially it is to make sure or reduce the risk of carbon leakage. So it’s trying to de.
[3:58] Rebecca Meadows: Incentivise production, moving to countries where there are fewer climate regulations in place and making sure that importers will bear the cost of any production that is moved to try and get around decarbonisation and climate action. It’s making sure that trade on a global scale is a level playing field and it protects SMEs, and it definitely will when it’s brought into the UK as well. So essentially the importer has a financial responsibility to declare the carbon, the embodied carbon of the product that has been imported into that country.
[4:51] Rebecca Meadows: Similarly, the UK will be the same and the exporter, they are going to be asked for their data for embodied carbon. And so this is where it’s important to have a grasp on your data, because then that can translate to carbon data. And like I said, CBAM in the UK is coming into play January 2027. So now is the perfect time to be prepared and get ready for that and start to engage supply chain. And some customers of ours, they’ve already had CBAM on the radar because they’re exporting to the eu.
[5:28] Rebecca Meadows: And because of that, the EU companies are requiring their data. Essentially, you know, they’re looking at, say, scope one, scope two emissions, you might have heard of that as sort of the greenhouse gas emissions. So it’s the same thing. We’re looking at all the carbon that is associated with that product and that is hopefully a good explanation of what CBAM is.
[5:55] Rich Dale: Brilliant, Rebecca. And at the minute, in terms of what’s sort of in scope, pardon the misuse of scope one, in scope two. But, you know, so not every product that you’re importing or exporting is currently covered by this. It’s really raw materials. Could you elaborate on that?
[6:19] Rebecca Meadows: Yeah, essentially it is sectors such as aluminium, cement, hydrogen, fertilizer, iron and steel and electricity. When, when, regarding the eu, when we’re looking at the uk, the UK have decided to not include electricity just because of where the majority of electricity production comes from, I think Norway and EU countries for the uk, but it’s those six, seven sectors primarily. And that’s because they have a higher embodied carbon level than other products and other sectors, essentially. So it’s focused on, you know, the biggest polluters, but it will probably be broadening the scope in years to come.
[7:06] Rebecca Meadows: So it’s. Even if you’re not in scope, I would still suggest it presents an opportunity to look and assess your production and your operations and your supply chain through and like I said, get a handle on that data, because it is only then going to present a opportunity to optimize your resource, your supply chain and effectively impact your bottom line in the process. So it’s definitely shouldn’t be seen as a burden, it’s definitely an opportunity. So, yeah, those sectors are included. And it also matters as well the value of the goods been exported, imported.
[7:48] Rebecca Meadows: So for EU CBAM, it is 50,000 tons of carbon. And if you go above that in terms of your embodied emissions, that’s what’s, you know, deemed. It’s. It’s sufficient to, to apply CBAM to. And in the UK, it’s £50,000 of the value of the goods being imported into the UK.
[8:17] Rich Dale: And so UK has another 12 months of grace. This is 2027. But I’m thinking a lot of. A lot of companies will. Obviously, in our world, we’re thinking mainly around steel and aluminium because a lot of either, you know, components just made out of them, whether little, little components, or you name it. So we wouldn’t be a long time in spending £50,000 in terms of that kind of material coming in before it starts to impact your eligibility to be compliant.
[9:06] Rich Dale: So in terms of some of the projects that you’ve worked on, like you mentioned that systems are the key to making this as painless as possible. So I take it there’s a lot of interaction in terms of the supply chain. How have you seen that actually working in practice in terms of getting that information exchange up and running? Is it something as simple as regular sharing of spreadsheet data or people getting into the mindset of more automated solutions?
[9:41] Rebecca Meadows: Yeah, yeah, essentially both. So we’ve had companies who have been asked by their supply chain, you know, you need to provide this data for us to then report our carbon. And we also know that companies are looking for automated solutions and we encourage that because anything you can do to, to reduce the manual and the resource and the time involved in quarterly reporting as it will be, that’s a huge cost to your business alone.
[10:13] Rebecca Meadows: And in today’s digital world there are so many avenues to go down to help you and there’s funds available like made smarter. There’s even in terms of collecting your energy data, small companies think that, you know, it’s going to be a huge amount of investment and actually you know, some low cost sensors on the market, you know, the 200 pound with a Raspberry PI to collect that data. So it is not a significant cost as people perceive it to be.
[10:45] Rebecca Meadows: And once you have that data, you can then see your production from you know, a bird’s eye view of everything that’s going on. And it will, you know, sometimes as well, in certain cases it’s opened companies eyes as to, you know, we were going to invest in say, you know, robotics or something that is quite high tech, big investment and actually we’ve looked at the data and we found that, well actually that oven, you know, that that’s actually not that efficient.
[11:16] Rebecca Meadows: So you’d be best investing in that which is a, you know, a lesser cost to the business that, than something that is shiny and new. So sometimes it’s, it’s in the small changes and the lower cost changes that you’ll see the greatest difference. And hopefully that should give confidence to SMEs because again, it’s an opportunity to understand your data.
[11:38] Rebecca Meadows: And when you understand that, you’re then not exposing yourself to the risk of actually incurring more charges because again, you can use default thresholds for estimated emissions but you will incur the highest charge because that’s what it’s designed to do. It’s designed to incentivise real data and real measurement.
[12:03] Rich Dale: It’s interesting. We first met through the Smart Manufacturing Data Hub project and one of the other partners on that was devtank and you know, they have some fascinating stories about the sensors that they’ve deployed with different customers, you know, and something as simple as, as you say, like an oven or a fan or a compressor that’s been left on overnight or you know, lights that are being used for longer hours than, than necessary.
[12:33] Rich Dale: You know, just, you know, just little stories that have actually wouldn’t have been at all obvious if it wasn’t for the fact that the data was there to say. There’s one in particular where there was a factory where somebody was coming in at 6 and turning all the machines on thinking they were doing everyone a favor, you know, getting everything warmed up.
[12:57] Rich Dale: But the shift didn’t start till 7 so you know, the, the electricity was spiking for or not spiking, but it was kicking in for an hour every day and they were able to eradicate that spend overnight. So yeah, it’s having the means of capturing the data and easily interpreting it for day to day use, never mind being able to then feed that through into the reporting mechanism. So how does the actual reporting piece work? I mean we’re all familiar with our tax returns and, and so on.
[13:38] Rich Dale: How do we report on a quarterly basis back to what the activity has been?
[13:46] Rebecca Meadows: Yeah, so the UK CBAM will be managed by hmrc, so it works effectively like a tax return. It’s designed to be hopefully a less administratively a burden for SMEs. It’s meant to be a really simple process and not too heavy on the admin, so it will effectively operate like a tax return and you will submit your quarterly figures to hmrc. So again, you know, ask hmrc, ask support providers for help if you don’t know if you’re in scope or what you’re reporting.
[14:22] Rebecca Meadows: We can also hopefully, you know, in the podcast link or description we’ve got tools that SMEs can use to estimate what their costs would look like and get a handle on what the, the, Sorry, I’ve lost my impact. Yeah, what the impact would be. So yeah, we, we can put that in the description because we’ve got tools and resources to look at that cost.
[14:50] Rich Dale: So what sort of information do you need to have at hand to be able to plug into your, into your, your calculator to be able to get a kind of a realistic answer or assessment of where you’re, where you’re at.
[15:04] Rebecca Meadows: So you would need to allow yourself to understand what you, what your total cost is going to be. It’s going to be your embodied carbon of the product that you are importing into the uk and you will need that data from suppliers. So whether that’s you EU or non EU suppliers, you need that data. You then need to understand as well if the country you are importing from has already contributed to another cbam or it might be the Emissions Trade Scheme.
[15:44] Rebecca Meadows: If they’ve already had a cost associated with that carbon, you can reduce that, that fee that you pay because it’s effectively already been accounted for in production. And so then if you get your total, it should be again embody carbon, your scope, one scope to your supply chain emissions. So the, the emissions in production, the indirect emissions. So direct is like, you know, sort of the fuel that you’re using in your production.
[16:16] Rebecca Meadows: Indirect might be the electricity and things like that and then scope three your supply chain emissions so it effectively operates the same as your greenhouse gas emissions. And understanding that data will give you a real good solid step in applying it to cbam.
[16:36] Rich Dale: I take it at this stage, the suppliers, they’ve had plenty of time to prepare for this. So if I wanted to get that data from my suppliers today, if they’re not already supplying it by default, they will have it. So you’re finding that is becoming pretty standard these days then in terms of people who’ve been preparing for this?
[17:01] Rebecca Meadows: Yeah, we’ve had a lot of SMEs who looking at EU C ban, for example, we’ve had SMEs who they might have a customer in the UK who was then exporting to the EU and because of that they now need your data. So it is becoming more common for the supply chain to be requesting this data. And so that’s why it’s really key to be on top of it. Because if, for example, your business, it might rely on 70% in a specific industry, a specific partner, you are then at risk.
[17:35] Rebecca Meadows: Because if you can’t provide that data, they can just go to another company who can provide data who’s maybe got a lower carbon count and will effectively reduce the overall cost and admin burden on them. So it’s really important to maintain contracts and you know, effectively future proof your business.
[17:57] Rich Dale: Just one specific point you made earlier on was, you know, about that kind of flow through of material. So let’s say I buy steel billets for machining parts, but I’m buying them from my supplier locally, but they have sourced that externally or you know, how does it flow through? If they are, they’re effectively the primary importer of that steel. Do I have anything to pay or will there be a bit of a sort of a pass through effect?
[18:39] Rebecca Meadows: Yeah. So if you are, I think it’s really key to remember so as an importer you are responsible for the financial end cost and if you are an exporter, you’re likely going to be asked for your data to provide to the importer. And so it again can get complex with supply chain and subsidiaries and different companies. But if we just remember who is importing and who is exporting, then that simplifies things. So like in my example of the SME, say company A. Okay.
[19:18] Rebecca Meadows: And then they’ve got company B also in the uk, but company B is exporting to company C in the eu. Everybody needs data regardless, especially with UK C band because that’s why I think even if you’re not in scope, you need to have handle on this because it will be expanding and effectively somewhere down the line you will be responsible to provide your data in that supply chain and in the value chain.
[19:47] Rebecca Meadows: And again, if you are an importer and you are responsible for the importance of the goods, you will bear the financial responsibility to declare that to hmrc or if you’re an EU company, it’ll be different, it’s on a certificate basis.
But it’s also important to note and to clarify that while the importer responsibility is in this example on the UK steel supplier, and they are the ones that report to HMRC, the cost will still be passed down to you if you’re procuring from them. And it’s likely that that will be a higher material cost. So in effect, you still bear the full burden of that legislation. Therefore, your carbon data now directly affects your competitiveness and your input costs as a business.
[20:05] Rich Dale: Okay. So there is a lot to take in. And even if, even if your products aren’t those primary areas that you talked about, electricity, steel, fertilizer and so on, this is coming down the line. This is going to become effectively like tax. It’s just going to be a thing everyone has to cater for. Are there specific systems that you recommend or that you work with in terms of, of how people work out the carbon? You know, if I’m a supplier, how do I work this stuff out to begin with?
[20:50] Rich Dale: You know, I’ve got a bill of materials, I’ve got my supplier, my supplier data, you know, where do I start with that?
[20:58] Rebecca Meadows: Yeah. So I think again going back to looking at your scope 1, 2, 3 emissions is a key starting point and will stand you in good stead to have that emissions data and know that it’s accurate. You can also look at verification through external bodies who will look at your data and be able to provide verification of that data that is accurate and maintained. But again, for SME, he’s, you’re just looking at your scope 1, 2, 3 emissions. There are lots of tools available online.
[21:35] Rebecca Meadows: The government, they published a complete guide to scope 1, 2, 3 for, for UK companies as well. So there is so much support out there. But again, it goes back to if you’re struggling, ask, ask somebody. And even like, like we mentioned, you know, local chambers, you know, they have export sessions, you know, ask your local chamber. Look, this is what I’m struggling with. Can you provide a session? Can you provide support? Contact ourselves? Again, we’re here to explain because there is nuance like said in different companies, subsidiaries, supply chains, where that production lies.
[22:12] Rebecca Meadows: So it is complex but there is support out there. And yeah, don’t, don’t try and muddle through it alone because yeah, you could end up paying a higher end fee as well if you try.
[22:27] Rich Dale: Yeah, if you just tick the default box, you’re definitely not doing yourself any favors. Not to mention all the potential hidden savings that could be there in your business if you start to look for them. You possibly just answered this question just based on what you just said. But I always ask my guests to leave listeners with one final actionable piece of advice to round things off, and that will get you to sort of give us your website address and whatnot in a second as well.
[23:01] Rich Dale: But, you know, what, what would you say to an SME today? And you know, that’s, you know, it’s January 26th and you know, what should they think about first?
[23:15] Rebecca Meadows: Okay, I would say, number one, you need to check if you’re in scope because that’s obviously critical to any journey. Number number two, I would say stop estimating and start measuring. I would make that so key to your process in this because I think, yes, you can get away with estimations, but you’re only going to harm yourself down the line. And again, when you’re looking at your supply chain and future proofing your business, they will expect accurate information. And if you can’t provide it, another SME or another company will. So start measuring.
[23:56] Rebecca Meadows: And I would also say, you know, for example, we have a company we’re working with and this has actually formed part of a project for a funded apprenticeship. So again, it’s an opportunity to involve young people in your business who actually typically care more about decarbonization, you know, on, on average, because it’s our future and it’s an opportunity for them to be involved and really understand your business and give them a purpose. But then there’s also added benefits of, you know, there’s grants and there’s funding out there, as we’ve talked about.
[24:34] Rebecca Meadows: You know, having an understanding of your data can give you a wide view on, okay, is there an R and D opportunity here? Is there grant funding available? Can we, you know, we’ve identified this specific part in our production needs to change. You know, is, is this a novel thing? Are we pioneering for our industry? Again, it’s looking at how do you be the best you can be and set an example for other companies. So check your in scope, start measuring, look at opportunities to involve other, you know, grants, funding, etc.
[25:12] Rebecca Meadows: And then the final piece of advice, I would say it’s to check what tools you can use and leverage those tools, whether that’s automation, whether that’s looking at AI as well in your reporting. And maybe you can sort of look at algorithms to identify, well, maybe you should look at this or there’s this alert that we can check. And, and again, it comes down to whether or not you have certain views about climate change.
[25:47] Rebecca Meadows: It does not dispute the fact that if you optimize your resource if you’re looking at your, where your energy spend is, what the cost of your product is to produce, you are inevitably going to impact your bottom line. So it is an opportunity and not a burden.
[26:03] Rich Dale: Absolutely hear here. I mean I’ve said this in other episodes, you know, there’s just, well, you know, there’s, it’s just a no brainer, you know, operating more efficiently whether it helps save the planet or not, which, you know, hey, who doesn’t like clean air to breathe and you know, predictable weather. But yeah, you know that, that impact on the bottom line and you know what I’m hearing as well is, you know, this, this is a competitive advantage in its own right.
[26:31] Rich Dale: You know, you mentioned earlier about, you know, if you can’t provide this data, you’re out of the game. So if you can provide it and make it accurate and make it super accessible for systems to talk to each other, then that in itself is going to be a selling point over other potential more laggard competitors. So thanks very much Rebecca. Can you just, where do, where do people get in touch with you? How do they get to play with the calculator?
[27:07] Rebecca Meadows: Yeah, sure. So best to go to our website, that’s nexusearthgroup.com and I’m sure Rich will be able to put that in the description or we’re also on LinkedIn and you know, connect with me there if you’ve got any more questions. Our tools and resources will be on the website and again I’ll provide Rich with the links to them so it should be really easy to access and download.
[27:32] Rich Dale: Happy days. Yeah, we’ll get that all linked up in the, in the show notes and well, once again Rebecca, it’s been a pleasure having you on to made the grow and thanks for your time and we’ll see you soon.
[27:42] Rebecca Meadows: Thanks very much for the invitation and I suppose when this goes out it won’t be Happy Christmas, it’ll be Happy New Year. So.
[27:50] Rich Dale: Exactly. Yeah. Here comes January. Cool. Okay, thanks a lot Rebecca.
[27:56] Rebecca Meadows: Brilliant.
