How to Calculate Embedded Emissions for CBAM

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.

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

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 significantly 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 Total: 96.9 tCO₂e

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 Indirect emissions are often overlooked. Always calculate both direct and indirect.

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.

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