How big an error is acceptable in a carbon audit? What materiality threshold do verifiers use?
Under the EU ETS verification rules, a misstatement is material at 5% of reported emissions for most installations and 2% for the largest emitters. Under ISO 14064-3, the verifier and the user of the report agree the threshold. Below the threshold, errors still have to be corrected or explained.
The EU ETS numbers
Implementing Regulation (EU) 2018/2067, the EU ETS accreditation and verification regulation, sets materiality in Article 23. It is 5% of total reported emissions for installations emitting up to 500,000 tonnes of CO2e a year, and 2% for larger installations. A verifier looks at misstatements one by one and added together.
Many verifiers use these figures as a reference for other programmes too, which is why 5% is often quoted as the norm.
ISO 14064-3 and voluntary reports
ISO 14064-3:2019 does not fix a number. The verifier sets materiality in the verification plan, based on the programme's rules or what the intended user needs. For a buyer report or a voluntary disclosure, 5% is common, but check the engagement letter.
Size is not the only test
- Qualitative issues can fail a report even if the tonnes are small: a missing site, a wrong method, or a claim the data does not support.
- Non-conformities with the monitoring plan or programme rules are reported whatever their size.
- Uncorrected misstatements below materiality still appear in the verifier's findings, and they add up over the year.
How to stay well inside the threshold
- Recompute every line: quantity times factor should equal the reported figure.
- Check units, especially litres against kg and kVAh against kWh.
- Remove duplicate invoices before totalling.
- Reconcile fuel and power totals with accounts and meter readings.
- Keep the source document for every line, so the verifier can sample it.
Worked example: is this error material?
- Reported emissions: 10,000 t CO2
- Errors found: a duplicated coal invoice of 240 t and a unit error of 80 t
- Together: 240 + 80 = 320 t, which is 3.2% of 10,000 t
- Against a 5% threshold: not material, but both must be corrected or explained
- If a further 200 t error appears: 520 t, which is 5.2%, so the report is materially misstated
What Senseible does here
Senseible runs rule checks before any verifier sees the data: it recomputes each line within max(0.01, 0.1%), flags missing quantities, units and factors, and fingerprints each file so identical copies are not counted twice. Its "Verified" status means those rule checks passed; it is not an independent verification opinion.
Sources: Commission Implementing Regulation (EU) 2018/2067, Article 23 (materiality levels), ISO 14064-3:2019, Validation and verification of greenhouse gas statements, European Commission, CBAM legislation and guidance
Last reviewed 2026-10-15. Confirm the materiality level in the CBAM definitive-period verification rules before quoting it for CBAM data.