Embedded Emissions Calculation: Examples

Calculating embedded emissions accurately is the most technically demanding aspect of CBAM compliance. This guide explains every part of the calculation — from understanding the formula to applying the right emission factors.

"Embedded emissions means the emissions from the production process of goods, including direct emissions and, where applicable, indirect emissions." — EU Regulation 2023/956, Article 3(20)

All emission factors and calculation methods in this article are sourced from IR (EU) 2025/2621 and EU Regulation 2023/956. Default values for specific CN codes and countries are published in the Official Journal of the EU. Last verified: July 2026.

What Are Embedded Emissions?

Embedded emissions (also called embodied emissions) are the total greenhouse gases released during the production of goods. For CBAM purposes, these are divided into:

Direct emissions — Released from fuel combustion on-site during production. For steel, this includes coke combustion in blast furnaces. For cement, this includes calcination of limestone.

Indirect emissions — Released during the generation of purchased electricity used in production. These are calculated separately and have their own default factors.

The CBAM Calculation Formula

Embedded emissions (tCO₂e) = Activity Data × Emission Factor

Where:

• Activity Data = mass of product in tonnes (or kWh for electricity)
• Emission Factor = tCO₂e per unit of activity data

Direct vs Indirect Calculation

Each product requires two separate calculations:

Direct embedded emissions: Direct = Mass × Direct Emission Factor

Indirect embedded emissions: Indirect = Mass × Indirect Emission Factor

Example Calculation

Parameter	Steel (BF-BOF)	Aluminium	Cement
Mass (tonnes)	100	50	200
Direct factor (tCO₂e/t)	1.85	1.514	0.60
Indirect factor (tCO₂e/t)	0.15	0.423	0.05
Total direct emissions	185 tCO₂e	75.7 tCO₂e	120 tCO₂e
Total indirect emissions	15 tCO₂e	21.2 tCO₂e	10 tCO₂e
Total embedded emissions	200 tCO₂e	96.9 tCO₂e	130 tCO₂e
Chargeable (Annex II)	185 tCO₂e	75.7 tCO₂e	130 tCO₂e

Annex II note: Steel and aluminium are Annex II sectors under Regulation 2023/956 Article 7(1) — only direct emissions are chargeable for CBAM purposes. Indirect emissions are reported but excluded from certificate cost. Cement is NOT in Annex II, so both direct and indirect are chargeable.

Total: Total = Direct + Indirect

Default vs Actual Emission Factors

Default Emission Factors

Published in IR (EU) 2025/2621. These are conservative values that vary by:

• Product category (CN code)
• Country of origin
• Production method

Default factors are easier to use but typically result in higher calculated emissions. They are the safest choice for compliance but may overstate your liability.

Actual Emission Factors

Based on verified emission data from your supplier. To use actual factors, you need:

• Emissions data verified by an accredited verifier
• Documentation of the calculation methodology
• Proof of production method

Actual factors can reduce your reported emissions but require rigorous documentation.

Industry-by-Industry Examples

Steel Imports (CN 7214 — Steel Rebar)

From Turkey, blast furnace production:

• Default direct factor: 0.535 tCO₂e/tonne
• Default indirect factor: 0.137 tCO₂e/tonne
• Quantity: 100 tonnes

Direct: 100 × 0.535 = 53.5 tCO₂e Indirect: 100 × 0.137 = 13.7 tCO₂e Total: 67.2 tCO₂e

Aluminium Imports (CN 7601 — Aluminium Ingots)

From Canada, hydro-powered production:

• Default direct factor: 1.514 tCO₂e/tonne
• Default indirect factor: 0.423 tCO₂e/tonne
• Quantity: 50 tonnes

Direct: 50 × 1.514 = 75.7 tCO₂e Indirect: 50 × 0.423 = 21.2 tCO₂e (reported, not chargeable — Annex II) Total embedded: 96.9 tCO₂e Chargeable: 75.7 tCO₂e (direct only)

Cement Imports (CN 252310 — Cement Clinker)

From Egypt:

• Default direct factor: 0.723 tCO₂e/tonne
• Default indirect factor: 0.089 tCO₂e/tonne
• Quantity: 200 tonnes

Direct: 200 × 0.723 = 144.6 tCO₂e Indirect: 200 × 0.089 = 17.8 tCO₂e Total: 162.4 tCO₂e

Special Cases

Multiple Production Methods

If the same product can be made using different methods (e.g., blast furnace vs. electric arc for steel), use the factor corresponding to the actual method used.

Mixed Shipments

A shipment containing products from multiple production methods must be split accordingly, with separate calculations for each portion.

Electricity

For electricity imports, the unit is MWh instead of tonnes:

Emissions (tCO₂e) = Quantity (MWh) × Emission Factor (tCO₂e/MWh)

Common Calculation Errors

Error 1: Using wrong units Always use metric tonnes. Check that supplier data is not in kilograms or pounds.

Error 2: Forgetting indirect emissions (or applying them incorrectly) Indirect emissions must always be calculated and reported. However, for Annex II sectors (steel, aluminium, electricity, hydrogen), they are excluded from the chargeable calculation. For cement and fertilisers, they are included. Applying the wrong rule produces incorrect certificate costs.

Error 3: Incorrect CN code mapping Each CN code has specific default factors. Using the wrong code means using the wrong factor.

Error 4: Mixing up default and actual factors Do not mix default values for some products and actual values for others within the same report without clear documentation.

FAQ

Can I use average emission factors for multiple products? No. Each CN code requires its own specific emission factor. Averaging is not permitted.

How often are default emission factors updated? Factors are reviewed annually and published in the Official Journal of the EU, typically in December.

Do I need to calculate emissions differently for simple vs complex products? Complex products (multiple components) should be reported at the CN code level, with each component calculated separately.

Sources

• EU Regulation 2023/956 — CBAM main regulation (Annex II indirect exemption rules)
• IR (EU) 2025/2621 — Default emission values and calculation methodology
• IR (EU) 2025/2548 — Transitional and definitive phase rules
• European Commission CBAM page

All emission factors and calculation methods in this article are sourced from IR (EU) 2025/2621 and EU Regulation 2023/956. Last verified: July 2026.

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