Understanding the Calculation of Embedded Carbon Emissions in Products
Companies calculate specific embedded emissions, expressed as tonnes of CO2 equivalent per tonne of product (tCO2e/t), through a process known as Life Cycle Assessment (LCA). This process involves:- Identifying all processes and materials involved in producing the product.
- Collecting data on energy use, raw material inputs, and other relevant factors.
- Applying emission factors to convert these inputs into CO2 equivalent emissions.
- Summing up emissions across the product’s life cycle.
- Dividing total emissions by the amount of product produced.
This calculation can be complex and may require industry-specific methodologies, often supported by specialized software and databases. Emitwise is able to support you with this if you need support.
Under the Carbon Border Adjustment Mechanism (CBAM) for companies importing goods into the EU, the calculation process includes:
- Accounting for direct emissions from production processes.
- Including indirect emissions from electricity consumption.
- Following specific methods outlined in CBAM regulations.
- Using EU-provided default values when actual data is unavailable.
Importers must obtain verified embedded emission data from their non-EU producers. If this data is not available, default values, which are typically less favourable, must be used.
Important to note that the current CBAM regulation no longer allows default values for emissions data.
Key points:
- Verified Data Required: Importers must provide verified actual emissions data for imported goods.
- No Default Values: The use of default values is not permitted.
- Consequences of Missing Data: Importers without verified data may face import bans, financial penalties, or higher estimated emissions obligations.
- Transition Period: Until the end of 2025, importers report data but do not purchase CBAM certificates.
- Importer Responsibility: Importers must collect and verify data from non-EU suppliers.
- Verification: Data must be verified by an accredited verifier, similar to EU ETS procedures.
This ensures accurate emissions reporting and incentivizes robust monitoring systems.