EU releases indirect-emissions guidance for CBAM implementation
The European Commission has published a technical study on indirect emissions under the Carbon Border Adjustment Mechanism (CBAM), providing policy analysis to support CBAM implementation and evolution. This study addresses how embedded indirect emissions—such as electricity and steam used in production—are measured, reported, and credited within the CBAM framework, which covers cement, iron and steel, aluminium, fertilisers, hydrogen, and electricity. The guidance is intended to clarify compliance pathways for importers and EU producers as CBAM transitions from its current phase into full operational scope.
Photo: Mike Cho / PexelsThe European Commission's Taxation and Customs Union directorate (TAXUD) released a technical study on indirect emissions under the Carbon Border Adjustment Mechanism on 8 June 2026, providing policy analysis to support both the implementation of CBAM and its potential evolution.
The CBAM, established under EU Regulation 2023/956, imposes a carbon price on imports of goods in specified sectors—cement, iron and steel, aluminium, fertilisers, hydrogen, and electricity—based on their embedded emissions. The mechanism is designed to prevent carbon leakage by equalising the carbon cost borne by EU producers (via the EU Emissions Trading System) with that faced by importers of covered goods.
Indirect emissions—chiefly electricity and steam consumed during production—represent a material component of total embedded emissions for energy-intensive industries. The study examines how these indirect emissions should be accounted for under CBAM, including methodologies for calculating default values, verifying actual indirect-emission data reported by importers, and transitioning between the current transitional phase and the future compliance-and-surrender phase.
The study provides policy analysis to support the implementation and potential evolution of the Carbon Border Adjustment Mechanism (CBAM).
Scope and affected sectors: The study directly affects importers and producers in chapters 25 (mineral products, including cement), 72 (iron and steel), 73 (articles of iron and steel), 76 (aluminium), 28 (inorganic chemicals, including fertilisers), and producers of hydrogen and electricity. These sectors face either direct compliance obligations (for importers) or competitive exposure (for EU producers) under CBAM rules.
Key implementation considerations: The technical analysis addresses determination of indirect-emission coefficients, treatment of renewable and low-carbon electricity, and rules for claimed indirect-emission reductions. It also clarifies which indirect-emission sources (e.g., grid electricity, self-generated renewable power, district heating) qualify for credit or adjustment under CBAM reporting.
Transitional and future phases: During the current transitional phase (January 2023–December 2025, now extended into 2026 pending finalisation), importers report embedded direct and indirect emissions for information only. From 1 January 2026 onwards (or as extended), the full compliance phase begins: importers must hold CBAM certificates matching the carbon content of imported goods, with indirect-emission data becoming operationally critical to certificate-surrender calculations.
What this means for shippers
Importers of covered goods (cement, steel, aluminium, fertilisers, hydrogen, electricity) must now align supply-chain carbon data with EU CBAM reporting standards. Review your production documentation—especially electricity invoices and energy audits—to verify indirect-emission claims and ensure compliance with the EU's default-value methodology. Non-compliance risks certificate shortfalls and penalties. Use the CBAM certificate-price tracker and embedded-emissions lookup to assess landed cost and confirm your suppliers' indirect-emission declarations align with current EU benchmarks.
