The European Commission published a technical study on indirect emissions under CBAM dated 8 June 2026, through DG TAXUD. The work focuses on how to calculate emissions from electricity consumed in producing CBAM goods. It also addresses when importers may claim actual indirect emissions and whether indirect emissions coverage should be extended to additional CBAM sectors.
The Commission frames the study around three policy questions. First, it considers how to determine operational default emission factors for indirect emissions. Second, it examines the conditions under which declarants may claim actual indirect emissions, including rules for direct technical links, power purchase agreements and verification. Third, it assesses whether indirect emissions should be extended to additional CBAM sectors.
The broader final report describes an analysis that combines methodological assessment, 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. The report also highlights risks including resource shuffling, weak data, verification complexity and overlap with EU indirect cost compensation.
Electricity as a compliance variable in CBAM
The study’s main signal is that electricity is becoming a core CBAM compliance variable. It notes that many exporters have treated CBAM primarily as a plant-level process emissions question, covering items such as fuel combustion, calcination, process chemistry, reduction agents and furnace emissions. The Commission’s study indicates that the electricity side is moving toward a more formal compliance architecture.
The focus is described as most relevant for aluminium, steel, fertilisers, cement, hydrogen and electricity-intensive processing chains. The study highlights that in countries outside the EU, grid electricity can have higher carbon intensity than the EU average. It points to a need for stronger evidence on electricity origin, metering, consumption boundaries and contractual power supply for the Western Balkans, Türkiye, Ukraine, North Africa, the Gulf and parts of Asia.
Default emission factors for indirect electricity emissions
The first policy area concerns the design of default emission factors for indirect emissions. This involves deciding which emissions factor should apply when an exporter or declarant cannot prove actual electricity-related emissions with sufficient quality. The study presents default factors as commercially significant because they can become a baseline penalty for weak data.
If an exporter cannot document actual electricity consumption and supply, the CBAM declarant may need to rely on a conservative default value. For countries with carbon-intensive grids, this could increase embedded-emissions figures and raise CBAM certificate exposure once the definitive system becomes operational. The study links this to potential cost impacts where electricity data quality is limited.
It also outlines an operational requirement for exporters: plants would need to demonstrate not only total electricity consumption but also consumption by installation, production line, product route, batch or process boundary. For aluminium rolling, ferroalloys, cement grinding, ammonia, hydrogen and precursor production, this shifts CBAM readiness toward electrical metering architecture rather than environmental reporting alone.
Claims for actual indirect emissions: links, PPAs and verification
The second policy area addresses when declarants should be allowed to claim actual indirect emissions. It includes requirements covering direct technical links, power purchase agreements and verification. The Commission’s publication identifies PPAs and technical links as central design conditions.
The study indicates that claims about using renewable or low-carbon electricity would likely require support beyond certificates or supplier statements. It describes a framework in which the credibility of actual-indirect-emissions claims depends on physical evidence, contractual evidence and verification evidence. A direct technical link is presented as likely to be the strongest proof option.
Examples of direct technical links include a dedicated renewable generation asset connected to the production installation or a clearly traceable behind-the-meter arrangement. PPAs are also described as potentially relevant; however, the key issue is whether the PPA demonstrates genuine low-carbon electricity consumption rather than reallocating clean electricity while physical grid supply remains carbon-intensive.
The final report metadata highlights resource shuffling risk as one of its key concerns. Resource shuffling is described as occurring when clean electricity is contractually assigned to CBAM-export production while dirtier electricity is left for other users without reducing total system emissions. The Commission indicates concern that actual-emissions claims must not become a paper exercise that undermines environmental integrity.
For Serbian and SEE exporters specifically referenced in the study discussion, it describes a due-diligence agenda tied to green PPAs. It states that green PPA documentation would need to be backed by a credible data package including power meter readings and hourly or sub-hourly consumption records where relevant. It also lists generation proof, grid connection documentation, guarantees of origin or equivalent certificate controls, matching logic, settlement records and independent verification.
Extending indirect emissions coverage across CBAM sectors
The third policy area addresses whether and how indirect-emissions coverage could be extended to additional CBAM sectors. Under the definitive CBAM framework described in the study summary, indirect emissions are currently covered for cement and fertilisers. During the transitional period described there, 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 elements including the EU ETS Directive, free allocation, 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 discussion characterizes this as politically sensitive due to potential compliance and cost burdens for non-EU exporters if coverage expands widely. It also notes arguments from EU producers that pay indirect carbon costs through electricity prices if imports are not subject to equivalent carbon constraints. The balance sought includes environmental integrity, WTO/legal robustness, administrative feasibility and competitive neutrality.
For energy-intensive sectors referenced in the discussion of Task 3 implications, aluminium is identified as an obvious candidate because electricity is central to primary aluminium emissions and cost structure. Steel is described as potentially affected through electric arc furnace routes, rolling and downstream processing as well as hydrogen-based pathways. Fertilisers are described as relevant because electricity can influence ammonia and hydrogen-related production routes.
Operational implications for exporters and importers
The exporter implications described in the study discussion focus on building an electricity evidence system. It states that exporters should not wait for final legal wording before developing data architecture supporting indirect-emissions calculations. A minimum credible package is described as including plant electricity balance and production-process boundary maps.
The same package is described as requiring product-level electricity allocation rules and a metering hierarchy alongside electricity supplier contracts and PPA documentation. It also references guarantees of origin or equivalent instruments plus grid-emission-factor assumptions. An audit trail linking electricity use to exported goods is included in the minimum package description.
For a Serbian steel, aluminium, cement, fertiliser or precursor producer referenced in the discussion section, it frames a key question around proving what electricity was consumed and when it was consumed. It also includes where it came from and how it was allocated to exported products while ensuring claims can withstand importer and verifier review.
The role of EU importers is described as changing because an importer or authorised CBAM declarant cannot simply accept supplier declarations at face value. It outlines a mirror-verification protocol involving supplier data requests and plausibility checks along with contract review for electricity arrangements. It also includes metering evidence collection steps plus production volume reconciliation and embedded-emissions calculation review with escalation rules if data quality is weak.
PPAs for industrial buyers outside the EU
The study discussion describes a commercial opportunity for renewable developers outside the EU tied to export-related PPA value under CBAM indirect-emissions rules. A PPA with an exporter may become more valuable if it helps reduce CBAM indirect-emissions exposure. This could improve offtaker credit quality and strengthen bankability of renewable projects serving industrial customers.
PPA value is described as depending on compliance credibility rather than contract labels alone. The discussion contrasts generic green contracts with structured CBAM-ready PPAs featuring clear metering arrangements and generation matching provisions. It also references certificate retirement processes alongside grid connection evidence.
The discussion further lists delivery shape details plus balancing responsibility and verification access requirements as part of structured PPA design considerations. For SEE renewable markets referenced there—Serbia, Montenegro, Bosnia and Herzegovina, North Macedonia and Albania—it highlights industrial exporters that could benefit from documented low-carbon power supported by verifiable arrangements rather than only “green electricity.”
Verification support based on technical systems
The study reinforces a need for third-party technical support before formal verification steps in CBAM reporting under its described approach to indirect emissions. Exporters are expected to use technical consultants familiar with production processes alongside electricity systems details such as metering configurations and SCADA integration where applicable. The discussion includes familiarity requirements covering PPAs, guarantees of origin instruments and emission-factor logic plus audit trails.
A practical readiness review described in the discussion covers plant electrical single-line diagrams plus grid interfaces with self-generation systems. It lists metering points along with transformer and substation records plus SCADA logs used for operational traceability where available. It also includes production-line consumption records together with production allocation rules.
The readiness review description further includes PPA settlement data plus certificate registry evidence used in reconciliation between production volumes and total electricity consumption figures. It states that without this technical basis a legal or accounting declaration would remain exposed during review by importers or verifiers.
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