CBAM embedded emissions, explained
Short answer: Embedded emissions are the greenhouse gases released while producing a good, expressed per tonne of product (tCO2e per tonne). Under CBAM they include direct emissions from the production process and, for cement and fertilisers, indirect emissions from the electricity used. They are calculated with the EU's published methodology.
What are embedded emissions?
Embedded emissions measure the carbon released to make a product, including emissions from the inputs used to make it. The unit is tonnes of CO2-equivalent per tonne of product. The EU importer uses this number to work out how many CBAM certificates to surrender.
Direct vs indirect emissions
| Type | What it covers | Typical evidence |
|---|---|---|
| Direct | Emissions from fuel burned and chemical reactions in production | Fuel purchase invoices, consumption records, process data |
| Indirect | Emissions from electricity consumed in production | Electricity bills, meter readings, grid or supplier emission factor |
| Precursors | Emissions already embedded in materials used (for example pig iron in steel) | Supplier data for those inputs |
According to the European Commission's CBAM Q&A, the scope is limited to direct emissions for iron and steel, aluminium and hydrogen, while importers of cement and fertilisers (and agglomerated iron ore) declare both direct and indirect emissions. Direct emissions include heating and cooling produced outside the installation.
The calculation, in outline
- Define the installation and the production process for each product.
- Total the direct emissions for the reporting period from fuel and process data.
- Add emissions from precursor materials, and from electricity for cement and fertilisers.
- Divide by the tonnes of product made to get emissions per tonne.
- Document the method, data sources and any assumptions.
What if you do not have measured data?
The EU publishes default values by product, country and year (Implementing Regulation (EU) 2025/2621). Importers can use them when verified actual data is not available. A mark-up is added to defaults: 10% in 2026, 20% in 2027 and 30% from 2028 (1% for fertilisers). The Commission notes that using actual values is in most cases more advantageous. Where a country has no listed value, the “Other countries and territories” row applies, which is based on the ten exporting countries with the highest emission intensities.
Verification
Importers declare either verified actual emissions or default values. Actual emissions must be verified by an independent verifier accredited by an EU or EEA national accreditation body, and verification is done per installation, including installations outside the EU. Operators begin monitoring in January 2026, and verifiers issue their first reports from January 2027, feeding the 2026 declaration due in September 2027. Keep source documents organised from the start.
Common mistakes
- Using the wrong customs code, which puts the product in the wrong category
- Mixing reporting periods across fuel, electricity and production data
- Missing fuel or production evidence, forcing default values
- Numbers in spreadsheets with no link to source documents
Frequently asked questions
What are embedded emissions in CBAM?
They are the greenhouse gases released making a product, measured in tonnes of CO2-equivalent per tonne of product, including direct emissions and, where relevant, indirect and precursor emissions.
What is the difference between direct and indirect emissions in CBAM?
Direct emissions come from fuel and chemical processes at the installation. Indirect emissions come from electricity consumed in production, and count under CBAM only for cement and fertilisers, not for iron, steel or aluminium.
Can I use default values instead of measured data?
Defaults can be used when verified actual data is missing, but they carry a mark-up (10% in 2026, 20% in 2027, 30% from 2028), so verified actual data is usually more advantageous.
Not sure which rules apply to you?
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Official sources: European Commission CBAM page · CBAM definitive regime · CBAM verification · Regulation (EU) 2025/2083. Reviewed against these on 2026-10-18.
Regulatory details change. This page is general information, not legal advice. Check the official EU sources and your customs broker before acting.