Understanding Embedded Emissions and Specific Data Requirements for CBAM

Key Concepts and Data for Calculating Embedded Emissions Under the Carbon Border Adjustment Mechanism (CBAM)

What are Embedded Emissions?

Embedded emissions refer to the total greenhouse gas emissions associated with the production of a good, covering all supply chain stages up to its import into the EU.

1. What’s the Difference Between Embedded and Specific Embedded Emissions?

  • Embedded emissions: The total emissions for producing a good, typically expressed in tonnes of CO2 equivalent (tCO2e).
  • Specific embedded emissions: Emissions per unit of product, usually expressed as tCO2e per tonne of product (tCO2e/t).

Example: Producing 100 tonnes of steel results in 200 tCO2e:

  • Embedded emissions: 200 tCO2e
  • Specific embedded emissions: 2 tCO2e/t

2. How Are Embedded Emissions Calculated?

  • Identify all production processes and inputs.
  • Measure emissions from:
    • Direct sources (e.g., fuel combustion).
    • Indirect sources (e.g., electricity use).
    • Raw material extraction and transportation.
  • Sum all emissions across the supply chain.
  • For specific embedded emissions, divide total emissions by the quantity produced.

3. What is a "Relevant Precursor" in Relation to Embedded Emissions?

A relevant precursor is a material used in production that significantly contributes to the overall embedded emissions. Under CBAM:

  • Precursors are listed in Annex I of the CBAM Regulation.
  • The embedded emissions of these precursors must be included in the final product’s emissions calculation.
  • Example: In steel production, iron ore and coke are relevant precursors.

4. What Data Do I Need from Suppliers to Calculate Embedded Emissions?

To calculate embedded emissions, you need the following data from suppliers:

  • Production details: Energy and raw material inputs, including fuel types and electricity sources.
  • Direct emissions: Process and on-site fuel combustion emissions.
  • Indirect emissions: Emissions related to electricity production.
  • Transport emissions: Data on transport methods and distances for raw materials.
  • Precursor emissions: Embedded emissions of relevant precursors.
  • Production output: Quantity of goods produced.
  • Verification documents: Independent verification of all data provided.

Under CBAM, this data must be verifiable and compliant with EU regulations, and importers are responsible for ensuring its accuracy.