Emissions methodology

CBAM distinguishes two types of goods. "Simple goods" are produced from input materials treated as having zero embedded emissions under the CBAM methodology, so their embedded emissions come entirely from their own production. "Complex goods" are made using relevant precursors that are themselves CBAM goods; the embedded emissions of those precursors must be included in the complex good's embedded emissions. A typical example is cement clinker, a precursor used to make Portland cement.

Direct emissions are those generated during the production of CBAM goods, including from heating and cooling consumed in production, regardless of where that heating or cooling is produced. Indirect emissions are those from the electricity consumed during production. The embedded direct and indirect emissions of relevant precursors are also included. CBAM scope is limited to direct emissions for iron and steel, aluminium and hydrogen, while importers of cement and fertilisers (and of agglomerated iron ore) must declare both direct and indirect emissions.

Indirect emissions are calculated by multiplying the electricity consumed during production of a CBAM good by the applicable electricity emission factor. That factor reflects either the emission factor of the grid supplying the electricity, or an actual electricity emission factor where the CBAM rules allow it, based on the country or region of electricity generation. Indirect emissions are only counted for goods whose indirect emissions fall within CBAM scope — namely cement and fertilisers (and agglomerated iron ore).

When verified actual emissions data is not available, authorised declarants may use default values for all CBAM goods except electricity. The default values are country- and year-specific and are set out in Annex I to Implementing Regulation (EU) 2025/2621; where a good or country is not listed, the "Other countries and territories" values apply. Default values carry a mark-up — 10% in 2026, 20% in 2027 and 30% from 2028 (with a lower 1% mark-up for fertilisers) — designed so that emissions are not underestimated. As a result, using verified actual values is usually more favourable than using default values where actual data is available.