From Product Carbon Footprint Declaration to Verifiable Data: Why LG Electronics Is Moving First With Catena-X

In the European automotive industry, sustainability expectations are moving beyond corporate-level commitments toward more reliable product- and component-level data. Product Carbon Footprint (PCF) sits at the center of this change, providing a measure of the carbon emissions generated across the production process, from raw material sourcing to manufacturing.

Major automakers have recently strengthened their policies and processes, requiring standardized PCF data as part of supplier selection and collaboration. At LG Electronics (LG), we see this trend as a signal that PCF data is likely to become an industry-wide standard and an important factor in supplier competitiveness.

Many Regulations, One Clear Requirement: Explain It With Data

The EU’s environmental and climate policy has steadily moved from broad goals to more binding regulatory requirements, with the EU Green Deal setting the long-term direction for a more sustainable European economy.

This direction has led to a series of regulatory initiatives, including Fit for 55,¹ the EU Battery Regulation (EUBR) ((EU) 2023/1542),² the Ecodesign for Sustainable Products Regulation (ESPR)³ and the Corporate Sustainability Reporting Directive (CSRD).⁴ Although these regulations differ in focus and scope, they are creating a more consistent expectation across industries: companies must be able to manage, explain and exchange PCF data at both the corporate and product levels.

This shift extends beyond companies based in the EU. Since 2026, certain products exported to the EU – including steel, aluminum, cement, fertilizer, electricity and hydrogen – have been subject to the Carbon Border Adjustment Mechanism (CBAM).⁵ Importers will be required to purchase and submit CBAM certificates based on the carbon emissions generated during production. Carbon data is no longer merely information to be included in reports; it has become a factor that directly affects transaction terms and costs.

In the automotive industry, product-specific figures must now be supported by connected data across the supply chain, from raw materials to parts and finished vehicles. This structure is taking shape through the Digital Product Passport (DPP), an electronic passport containing product-level PCF data. Starting with batteries in 2027, it will gradually become mandatory for major export items such as textiles and electronics, shifting sustainability from a claim to something companies must prove with data.

PCF Data as More Than a Reporting Figure

As the EU’s approach to PCF regulation develops alongside broader manufacturing innovation, particularly Industry 4.0,⁶ PCF data is becoming operational information that moves through manufacturing and supply chain systems, rather than remaining limited to reporting. This makes data spaces,⁷ standardization and interoperability key elements of future PCF management, allowing companies to generate and exchange data through shared systems instead of relying only on separate calculations after production.

In this context, PCF data is evolving into a business tool that can support everyday business decisions across process improvement, material selection and supplier comparison. As production processes change, companies need to continuously manage, explain and verify when and where the data was generated, and under what conditions.

The Real Challenge Is Evidence, Not Calculation

At LG, we recognized that the challenge is not an inability to calculate PCF information. The real challenge is ensuring the source and reliability of the data, which requires evidence, traceability and connectivity.

Many PCF figures still rely on secondary data based on industry averages instead of primary data generated from actual manufacturing sites. As a result, process improvements may not be reflected quickly, customer audits may need additional explanation and supplier comparisons can become more difficult. In these cases, PCF remains a number to be explained rather than a tool for decision-making.

Some European OEMs are already testing PCF data exchange within their supply chains, but readiness varies among lower-tier suppliers. Many still lack the systems, experience or internal standards needed to manage and exchange product-level carbon data, creating a gap between fast-moving OEM requirements and the pace of the broader supply chain.

This places Tier 1 suppliers in an important position to help connect OEM requirements with real supply chain operations. At LG, we recognized that European OEM expectations would need to be translated into proactive operational capabilities, regardless of regional differences in readiness.

Exchanging PCF Data in Practice With Catena-X

Beginning in May 2026, we have been conducting a pilot project designed around real operating conditions to exchange PCF data across a connected automotive supply chain. The project involves LG Chem for raw materials, New Material Industry and Shinsung Autotech for processing, LG Vehicle Solution Company for automotive components and KG Mobility (KGM) as the vehicle manufacturer.

Our data framework is centered on Catena-X, the world’s first open and collaborative data ecosystem designed specifically for the global automotive industry. It is built on key principles of interoperability, trusted digital identities, self-sovereignty and shared governance to enable secure, standardized and sovereign data exchange across the entire value chain – from automakers and suppliers to distributors, service providers and recyclers.

Catena-X allows participating companies to protect sensitive business information while sharing essential data for regulatory compliance and business transactions, such as carbon emissions data. By providing common standards and infrastructure, it reduces complexity, lowers costs and supports collaboration at scale.

Our pilot project focuses on connecting actual manufacturing data across the supply chain under the Catena-X global standard rulebook. By using data generated from real processes rather than average values or estimates, we are supporting more consistent and reliable data management as EU requirements for PCF and Scope 3 emissions disclosure continue to advance.

However, implementing data space-based connectivity in an actual supply chain environment can be complex. Each company participating in the pilot operates with different systems and data management methods.

Glassdome, a company specializing in carbon data management, is joining the project to help bridge these differences and support integration. It collects measured data at each stage of the supply chain, converts it into PCF data aligned with the Catena-X rulebook and enables participating companies to maintain data sovereignty while safely exchanging only necessary information. In this structure, PCF data becomes operational information connected to real processes and decision-making.

Those Who Prepare First Set the Pace

As sustainability data exchange integrates into everyday business in the automotive industry, first-hand experience with shared data platforms will be an important source of preparedness.

Our approach is to adapt early by working with customer requirements and real operating conditions, helping reduce uncertainty, strengthen partnerships and establish a standard to build shared progress across the supply chain. For a proactive Tier 1 supplier such as LG, this will create many opportunities in the near future to play a defining role in closing readiness gaps across the ecosystem.

# # #

¹ An EU legislative package aimed at reducing greenhouse gas emissions by 55 percent by 2030.

² A unified EU regulation that strengthens lifecycle and supply chain responsibilities for batteries. Starting in February 2025, EV batteries and large industrial batteries are required to calculate and disclose their carbon footprint.

³ An EU regulation that requires products to incorporate lifecycle sustainability considerations from the design stage, including durability, repairability and recyclability.

⁴ A directive requiring companies to disclose financial performance and ESG information — covering environmental, social and governance factors — in a transparent and comparable manner.

⁵ The EU’s carbon border adjustment mechanism. It is designed to prevent carbon leakage, where emissions shift from countries with strict carbon regulations to those with weaker rules, by imposing costs such as certificate purchases based on the embedded emissions of imported goods.

⁶ A next-generation industrial innovation trend that digitalizes manufacturing processes through data, automation and connected technologies to improve both productivity and flexibility.

⁷ A data exchange environment where participating entities can securely share and connect only the necessary data under common rules and standards, while maintaining ownership and control over their own data.