How to Calculate CBAM Embedded Emissions with Actual Data

Since 1 January 2026 the EU Carbon Border Adjustment Mechanism is a financial obligation: an EU importer of steel, aluminium, cement, fertilisers, hydrogen or electricity buys certificates for the emissions embedded in what it imports. The importer can use the Commission's default values, or the actual emissions of the plant that made the goods. Only the producer can calculate the actual figure. This guide explains how, for an exporter in any country outside the EU.

The rules that apply

The Commission's Guidance No. 3 on calculation methods (August 2026) explains these acts for operators and is the document to keep open while you work.

The formula

For a simple good, with no precursors in scope, specific embedded emissions are the direct and indirect emissions attributed to the good's production process, divided by its activity level (the tonnes produced):

A complex good is made from precursors that are themselves CBAM goods: hot-rolled coil made from slab, aluminium products made from unwrought aluminium, fertilisers made with ammonia. Their embedded emissions come along with them. Precursors produced in the EU count as zero, because they already paid the EU carbon price.

Direct emissions: three ways to monitor

• Standard calculation method. Activity data × emission factor × oxidation factor (for combustion) or conversion factor (for process emissions). Fuel invoices, meter readings and lab analyses are the evidence.
• Mass balance. For processes where carbon enters in several inputs and leaves in products (such as steelmaking), count the carbon in every input and output stream and convert the difference to CO2.
• Measurement-based. Continuous emission measurement at the stack.

Methods can be combined across an installation, as long as nothing is counted twice and nothing is left out. CO2 is covered for all goods, plus nitrous oxide for fertilisers and perfluorocarbons for aluminium.

Indirect emissions and the electricity factor

Indirect emissions, from the electricity a process consumes, are part of embedded emissions in the definitive period only for cement, fertilisers and agglomerated iron ore (sintered ore). Because sintered ore is a precursor, its indirect emissions do travel into iron and steel goods made from it; a mill's own electricity does not.

The default electricity factor is the Commission's grid factor for the country of origin, published with the default values and based on IEA data. A lower actual factor is allowed only with either a direct technical connection to the generator (shown by a single-line diagram and smart-meter data at intervals of an hour or less), or a power purchase agreement for physical delivery with grid-connection proof and hourly meter data. Virtual PPAs do not qualify. A national grid factor from your own government is not the CBAM default.

Worked example: a re-rolling mill

An illustrative mill buys slab from an integrated steelmaker and rolls it into hot-rolled coil (CN 7208). In 2026 it produces 100,000 tonnes of coil and consumes 103,000 tonnes of slab: the extra 3% is scale, crop ends and scrap, and it counts. Its reheating furnace burns 120 TJ of natural gas. The slab supplier provides a verified SEE of 1.90 t CO2e per tonne.

The precursor is 97% of the result. That is typical for a downstream mill, and it is why the supplier's verified figure matters more than the mill's own fuel. A mill that cannot get one must use the default value for the slab instead, and the coil's SEE rises with it.

Against the default values

Defaults are national averages with a mark-up of 10% for 2026 imports, 20% for 2027 and 30% from 2028 (1% for fertilisers). A mill that is cleaner than its country's average gains most from actual data, but how much an importer saves in certificates also depends on the benchmark adjustment for free allocation, which differs between actual and default values and has to be worked out for each installation. What CBAM default values cost your buyer shows the default side of that calculation.

Verification

• Actual values must be verified by a verifier accredited under the CBAM rules before an importer can use them. Default values need no verification.
• The reporting period is the calendar year. The fiscal-year option of the transitional period has gone.
• The operator prepares a monitoring plan, an annual emissions report, a summary for declarants and, where needed, a confidential addendum for a specific declarant.
• Site visits are physical as a rule. A visit can be virtual only if the previous year's was physical, and waived only if the two previous years' were.

What a verifier asks for in practice is in what a CBAM verifier checks.

Dates for 2026 imports

Your buyer needs your verified figures well before September 2027, so the 2026 calendar year should be monitored now and verified early in 2027.

Checklist for exporters

• Define the installation, its production processes and the CN codes of every good it exports to the EU.
• Choose a monitoring method for each source stream and write it into a monitoring plan.
• Collect the year's fuel, process and production data with the invoices and meter records behind them.
• List precursors by supplier and ask each for its verified SEE; record mass consumed, not mass contained.
• Check whether your sector counts indirect emissions, and which electricity factor you may use.
• Book an accredited verifier early: capacity is limited in the first verification year.

Check what your buyer pays on defaults for your own goods, every year to 2034:

You can check the default value your buyer would use for any CN code and country of origin, free and without an account, with ZeroCarbon's CBAM default-value lookup (it is one of the public tools on our API and MCP server). ZeroCarbon's CBAM workspace then attributes your installation's emissions to each good, carries precursor figures from your suppliers, compares actual against default, and prepares the verifier pack and the communication to your EU importer. Request a workspace to run it on your own plant's data.