Glossary
Embedded emissions
Under the EU's Carbon Border Adjustment Mechanism (CBAM), the greenhouse gases released in making a good: direct emissions from production, plus indirect emissions from the electricity used. They are the basis for the number of CBAM certificates due.
- Legal source
- CBAM Regulation, Article 3(22) ↗
- Who it applies to
- Every good covered by CBAM. Authorised CBAM declarants declare the embedded emissions of their imports each year, and registered operators outside the EU determine them for the goods their installations make. For the goods listed in Annex II, such as iron and steel, only direct emissions count.
- Example
- Screws and bolts of iron or steel, Combined Nomenclature (CN) heading 7318, count only the direct emissions from making them, because Annex II lists them. Portland cement other than white (CN 2523 29 00) isn't in Annex II, so it counts direct emissions and the indirect emissions from the electricity used to make it.
The law counts two parts:
- Direct emissions come from the production processes of the goods, including the heating and cooling used in them, wherever that heating or cooling is produced.
- Indirect emissions come from producing the electricity consumed in those processes, wherever that electricity is produced.
They are calculated with the methods in Annex IV, either from actual emissions, based on primary data from the production processes, or by reference to
Our explainer on default values and actual emissions shows how to choose between the two.
Regulations
Carbon Border Adjustment Mechanism (CBAM)
Implementing Regulation (EU) 2026/1740 corrected Annexes I and IV of the default values act, Implementing Regulation (EU) 2025/2621
Used in
EU CBAM certificate price: how certificates work and what they cost
How the EU CBAM certificate price is set, when you can buy, the 50% quarterly holding rule, surrender by 30 September 2027, and a worked cost example.
EU CBAM default values or actual emissions: which to use, and how embedded emissions are calculated
Under the EU CBAM, you declare embedded emissions from verified supplier data or from default values with a mark-up. How to choose, and what to ask suppliers.
EU CBAM 50-tonne threshold: does it apply to you, and what if you cross it?
At 50 tonnes or less a year of CBAM goods (not electricity or hydrogen), you're exempt from the EU CBAM. What counts, and the penalty for crossing unauthorised.
EU CBAM for producers and exporters outside the EU: registration, verification and who pays
Making steel, aluminium, cement or fertiliser in India or elsewhere outside the EU? What EU CBAM means for you: optional registration, verification, who pays.
EU CBAM downstream products: what the proposed extension covers, for whom and from when
The Commission proposes adding downstream steel and aluminium goods to EU CBAM from 1 January 2028. Check the CN codes, who it affects and where it stands.
EU CBAM simplification: what Regulation (EU) 2025/2083 changed
EU CBAM simplification: a 50-tonne yearly threshold replaced the €150 exemption, the deadline moved to 30 September and the quarterly holding fell to 50%.