The European Commission has published a technical study on indirect emissions under CBAM, dated 8 June 2026, through DG TAXUD. The work addresses how emissions from electricity consumed in producing CBAM goods should be calculated. It also examines when importers may claim actual indirect emissions and whether indirect emissions coverage should be extended to additional CBAM sectors.
The Commission structures the study around three policy questions. It considers how to determine operational default emission factors for indirect emissions. It also sets out conditions under which declarants can claim actual indirect emissions, including rules for direct technical links, power purchase agreements (PPAs) and verification, and whether coverage should expand to more CBAM sectors.
The broader final report describes an approach that combines methodological assessment, a review of existing CBAM rules, scenario testing and stakeholder input. It evaluates environmental integrity, carbon-leakage prevention, administrative feasibility and even-handed treatment between EU and non-EU producers. It also highlights risks including resource shuffling, weak data, verification complexity and overlap with EU indirect cost compensation.
Electricity as a compliance variable for CBAM goods
The study’s main policy signal is that electricity is becoming a core CBAM compliance variable. It notes that many exporters have previously treated CBAM primarily as a matter of plant-level process emissions such as fuel combustion, calcination, process chemistry, reduction agents and furnace emissions.
The Commission’s analysis indicates that the electricity side is moving closer to formal compliance architecture. This is especially relevant for aluminium, steel, fertilisers, cement and hydrogen, along with electricity-intensive processing chains. The study points to higher grid carbon intensity outside the EU compared with the EU average.
It identifies regions where exporters may need stronger evidence on electricity origin, metering, consumption boundaries and contractual power supply. The named areas include the Western Balkans, Türkiye, Ukraine, North Africa, the Gulf and parts of Asia. The study frames this as a forward-looking requirement for exporters operating in those contexts.
Default emission factors for indirect electricity emissions
One policy area focuses on the design of default emission factors for indirect emissions. The practical question is which emissions factor should apply when an exporter or declarant cannot provide actual electricity-related emissions with sufficient quality.
The commercial importance is described as substantial because default factors can function as a baseline penalty for weak data. If actual electricity consumption and supply cannot be documented adequately, the CBAM declarant may need to rely on conservative default values. For countries with carbon-intensive grids, this could increase embedded-emissions figures and certificate exposure once the definitive system is operational.
The operational lesson for exporters is that weak electricity data may become costly. Plants are expected to demonstrate not only total electricity consumption but also consumption by installation, production line, product route, batch or process boundary. The study links this requirement to aluminium rolling, steel rolling, ferroalloys, cement grinding, ammonia production, hydrogen production and precursor production.
Conditions for claiming actual indirect emissions using PPAs
A second policy area examines when declarants may claim actual indirect emissions. It includes requirements covering direct technical links, PPAs and verification procedures. The publication explicitly identifies PPAs and technical links as central design conditions.
The study frames this as a signal for green electricity procurement beyond certificates or supplier statements. It indicates that credibility of actual-indirect-emissions claims depends on physical, contractual and verification evidence. It therefore connects compliance outcomes to how low-carbon electricity use can be demonstrated.
For proof strength, it describes direct technical links as likely to be the strongest option. Examples include a dedicated renewable generation asset connected to the production installation or a clearly traceable behind-the-meter arrangement. PPAs are also considered relevant depending on whether they demonstrate genuine low-carbon electricity consumption rather than only reallocating clean electricity while physical grid supply remains carbon-intensive.
The report highlights resource shuffling as a key concern in its metadata. Resource shuffling is described as contractually assigning clean electricity to CBAM-export production while leaving dirtier electricity for other users without reducing total system emissions. The Commission’s concern is that actual-emissions claims must not become a paper exercise that undermines environmental integrity.
For Serbian and Southeast European exporters referenced in the study’s implications section, the due-diligence agenda includes building a credible data package beyond contract documentation. The elements listed include power meter readings; hourly or sub-hourly consumption records where relevant; generation proof; grid connection documentation; guarantees of origin or equivalent certificate controls; matching logic; settlement records; and independent verification.
Indirect emissions coverage across additional CBAM sectors
A third policy area addresses whether and how indirect-emissions coverage could extend to more CBAM sectors. Under the definitive CBAM framework described in the summary, indirect emissions are currently covered for cement and fertilisers. During the transitional period described in the same summary, indirect emissions are reported for all CBAM goods except electricity.
The Task 3 summary places this question within the broader EU carbon leakage framework. It references the EU ETS Directive, free allocation mechanisms, indirect cost compensation and the CBAM Regulation. It also notes that state-aid rules for indirect cost compensation define how Member States may compensate electricity-intensive industries for indirect carbon costs passed through power prices.
The study characterises this issue as politically sensitive because extending coverage too widely could raise compliance and cost burdens for non-EU exporters. If coverage is not extended, EU producers paying indirect carbon costs through electricity prices may argue imports do not face an equivalent carbon constraint. It therefore frames balancing needs around environmental integrity, WTO/legal robustness, administrative feasibility and competitive neutrality.
Sectors highlighted for potential electricity-linked impacts
For energy-intensive sectors discussed in the implications section, aluminium is identified as an obvious candidate because electricity is central to primary aluminium emissions and cost structure. Steel is also described as potentially affected through electric arc furnace routes, rolling operations, downstream processing and hydrogen-based pathways.
Fertilisers are described as relevant because electricity can influence ammonia production routes and hydrogen-related pathways. Cement is described as affected through grinding and electricity consumption even though process emissions remain dominant in cement production.
Exporter evidence systems: metering boundaries and allocation rules
The implications section states that exporter readiness now needs an electricity evidence system. Exporters are advised not to wait for final legal wording before building data architecture supporting their claims about electricity use in production.
The minimum credible package listed includes plant-level electricity balance; production-process boundary maps; product-level electricity allocation rules; metering hierarchy; electricity supplier contracts; PPA documentation; guarantees of origin or equivalent instruments; grid-emission-factor assumptions; and an audit trail linking electricity use to exported goods.
For a Serbian steel, aluminium, cement, fertiliser or precursor producer referenced in the implications section, the key question posed is whether the plant can prove what electricity was consumed and when it was consumed. It also includes where it came from and how it was allocated to exported products so that claims can withstand importer and verifier review.
Importer mirror-verification requirements under CBAM
The study indicates that EU importers or authorised CBAM declarants cannot simply accept supplier declarations at face value when actual indirect-emissions claims are made. Instead it describes a mirror-verification protocol requiring supplier data requests and plausibility checks.
The protocol elements listed include reviewing electricity contracts; checking metering evidence; reconciling production volumes; reviewing embedded-emissions calculations; and applying escalation rules if data quality is weak. This approach ties importer review directly to both contractual documentation and measurement evidence used by exporters.
PPA bankability tied to compliance credibility
The study describes a commercial opportunity for renewable developers outside the EU linked to PPAs with exporters seeking reduced CBAM indirect-emissions exposure. A PPA may become more valuable if it helps reduce exposure under the indirect-emissions calculation approach discussed in the study.
It states that improvements in offtaker credit quality could strengthen bankability of renewable projects serving industrial customers if PPAs support compliance requirements. However it notes that PPA value depends on compliance credibility rather than contract labels alone.
A generic green electricity contract is described as weaker than a structured CBAM-ready PPA with clear metering arrangements. The elements listed include generation matching; certificate retirement; grid connection evidence; delivery shape; balancing responsibility; and verification access available to relevant parties.
Verification support using technical due diligence methods
The study reinforces third-party technical support before formal verification in its implications section. Exporters are expected to use technical consultants familiar with production processes alongside electrical systems such as metering infrastructure and SCADA environments.
A practical readiness review described in the study covers an electrical single-line diagram plus grid interfaces and self-generation interfaces at plants. It also lists metering points; transformer and substation records; SCADA logs; production-line consumption data; production allocation rules; PPA settlement data; certificate registry evidence; and reconciliation between production volumes and electricity consumption.
Three core takeaways highlighted in the study materials
The first takeaway presented is that the Commission is preparing ground for operational indirect-emissions rules under CBAM through this technical work rather than issuing a final regulation by itself. It characterises the study as a policy evidence base supporting definitive-period design decisions.
The second takeaway presented is that actual-indirect-emissions claims are likely to require robust evidence focused on direct technical links, PPAs and verification procedures. This implies central roles for electricity procurement documentation alongside metering records within compliance processes.
The third takeaway presented concerns possible extension of indirect-emissions coverage to additional sectors in future policy moves under CBAM design work referenced by Publications Office materials cited in the summary. It links such changes to strategic importance of green electricity procurement alongside effects on industrial PPAs, renewable project bankability and supply-chain due diligence for EU-bound products.
Exporter readiness steps referenced in the study implications
The practical action list states exporters should map electricity consumption by product and process immediately while identifying metering gaps across installations or boundaries used in reporting. It also calls for collecting electricity supplier documentation together with PPA documentation used to support claims about power supply characteristics relevant under CBAM calculations.
The list further calls for establishing a guarantee-of-origin or equivalent certificate-control process alongside building product-level allocation methodology used in embedded-emissions calculations. It also references preparing comparisons between default-versus-actual emission approaches so differences can be assessed before costs become financially material under CBAM operations described in the implications section.
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