The European Commission has published a technical study on indirect emissions under the EU CBAM, dated 8 June 2026, through DG TAXUD. The work examines how emissions from electricity consumed in producing CBAM goods should be calculated. It also addresses when importers may claim actual indirect emissions and whether indirect-emissions coverage should expand to additional CBAM sectors. (Taxation and Customs Union)
- Electricity as a compliance variable for CBAM goods
- Default emission factors for indirect electricity
- Claiming actual indirect emissions with PPAs and verification
- Indirect-emissions coverage across additional CBAM sectors
- Sectors highlighted by the study: aluminium through cement
- Operational implications for exporters building an evidence system
- PPA structuring for industrial customers outside the EU
- Verification support: technical due diligence before audit
The Commission structures the study around three policy questions. It considers how to determine operational default emission factors for indirect emissions, and the conditions under which declarants can claim actual indirect emissions. Those conditions include rules for direct technical links, power purchase agreements and verification, alongside a question on extending indirect emissions to more CBAM sectors. (Taxation and Customs Union)
The broader final report describes an analysis combining 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. It also examines risks including resource shuffling, weak data, verification complexity and overlap with EU indirect cost compensation. (Publications Office of the EU)
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 plant-level process emissions, covering fuel combustion, calcination, process chemistry, reduction agents and furnace emissions. The Commission’s study indicates that the electricity component is moving toward a more formal compliance architecture.
The impact is described as most relevant for aluminium, steel, fertilisers, cement, hydrogen and electricity-intensive processing chains. The study highlights that this is especially significant in countries outside the EU where grid electricity can have higher carbon intensity than the EU average. For the Western Balkans, Türkiye, Ukraine, North Africa, the Gulf and parts of Asia, it points to stronger requirements for evidence of electricity origin, metering, consumption boundaries and contractual power supply.
Default emission factors for indirect electricity
The first policy area set out in the study concerns the design of default emission factors for indirect emissions. This involves selecting which emissions factor applies when an exporter or declarant cannot provide actual electricity-related emissions with sufficient quality.
The commercial importance is described as substantial because a default factor can become a baseline penalty for weak data. If an exporter cannot document actual electricity consumption and supply, the CBAM declarant may need to use a conservative default value. For countries with carbon-intensive grids, this could increase embedded-emissions figures and raise certificate exposure once the definitive system operates.
For exporters, the operational lesson is that weak electricity data may become expensive. 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 lists aluminium rolling, steel rolling, ferroalloys, cement grinding, ammonia production, hydrogen production and precursor production as relevant examples that would require stronger electrical metering architecture.
Claiming actual indirect emissions with PPAs and verification
The second policy area focuses on 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. (Taxation and Customs Union)
The study frames this as a signal for green electricity procurement because claims about renewable or low-carbon electricity are expected to rely on more than certificates or supplier statements. It describes a framework in which credibility depends on physical, contractual and verification evidence supporting actual-indirect-emissions assertions.
A direct technical link is described as likely to be the strongest form of proof, including dedicated renewable generation connected to production installations or clearly traceable behind-the-meter arrangements . PPAs are also described as potentially relevant, but the key issue is whether they prove genuine low-carbon electricity consumption rather than reallocating clean electricity on paper while physical grid power remains carbon intensive.
The report highlights resource shuffling risk as central to its concerns . Resource shuffling is described as occurring when clean electricity is contractually assigned to CBAM-export production while dirtier electricity continues to be used by other users without reducing total system emissions. The Commission indicates that actual-emissions claims must not become a paper exercise that undermines environmental integrity . (Publications Office of the EU)
For Serbian and SEE exporters in particular, the study points to due diligence needs beyond contract documents . It lists elements such as power meter readings; hourly or sub-hourly consumption records where relevant; generation proof; grid connection documentation; GO or equivalent certificate controls; matching logic; settlement records; and independent verification. The result is described as turning electricity procurement into a CBAM engineering task.
Indirect-emissions coverage across additional CBAM sectors
The third policy area addresses whether indirect-emissions coverage could extend to more 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 in that summary, indirect emissions are reported for all CBAM goods except electricity.
The Task 3 summary places this question within a broader EU carbon leakage framework 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 . (Publications Office of the EU)
The study describes this as politically sensitive because extending coverage too widely could increase compliance and cost burdens for non-EU exporters. It also notes that if coverage is not extended far enough, EU producers paying indirect carbon costs through electricity prices may argue imports face no equivalent carbon constraint . The work indicates an effort to balance environmental integrity, WTO/legal robustness, administrative feasibility and competitive neutrality.
Sectors highlighted by the study: aluminium through cement
For energy-intensive sectors discussed in relation to potential coverage expansion, 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 having strong relevance 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.
Operational implications for exporters building an evidence system
The exporter implication described in the study is that CBAM readiness now requires an electricity evidence system. Exporters are described as needing data architecture development rather than waiting for final legal wording . The minimum credible package listed includes plant electricity balance; production-process boundary maps; product-level allocation rules; metering hierarchy; 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 Serbian steel, aluminium, cement, fertiliser or precursor producers highlighted in the study discussion , the key question becomes whether plants 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 review and verifier scrutiny.
The role of EU importers is described as changing because importers or authorised declarants cannot accept supplier declarations at face value . The study describes a mirror-verification protocol involving supplier data requests; plausibility checks; contract reviews; metering evidence; production-volume reconciliation; embedded-emissions calculation review; and escalation rules if data quality is weak.
PPA structuring for industrial customers outside the EU
The study describes a commercial opportunity for renewable developers outside the EU through PPAs with exporters . A PPA may become more valuable if it helps reduce CBAM indirect-emissions exposure by improving offtaker credit quality and strengthening bankability of renewable projects serving industrial customers.
It also states that PPA value depends on compliance credibility . A generic green electricity contract is described as weaker than a structured CBAM-ready PPA with clear metering; generation matching; certificate retirement; grid connection evidence; delivery shape; balancing responsibility; and verification access.
For SEE renewable markets specifically mentioned—Serbia, Montenegro, Bosnia and Herzegovina, North Macedonia and Albania—the strongest commercial model is described as not only “green electricity” but “CBAM-verifiable electricity” . This framing links industrial export needs with documented low-carbon power procurement.
Verification support: technical due diligence before audit
The study reinforces third-party technical support needs before formal verification . Exporters are expected to use technical consultants familiar with production processes alongside electricity systems such as metering and SCADA operations. It also references expertise covering PPAs; guarantees of origin; emission-factor logic; and audit trails.
A practical readiness review described in the study includes coverage of electrical single-line diagrams; grid interfaces and self-generation interfaces; metering points; transformer and substation records; SCADA logs; production-line consumption; production allocation rules; PPA settlement data; certificate registry evidence; and reconciliation between production volumes and electricity consumption . Without this technical basis described in those terms, legal or accounting declarations are stated as remaining exposed.
Elevated by CBAM.Clarion.Engineer
