Commission study on CBAM indirect emissions: options, not law

The Commission's technical study on CBAM indirect emissions asks how CBAM could handle emissions from the electricity used in production. It examines three topics: default factors, possible conditions for claiming actual indirect emissions, and a possible extension of indirect-emissions coverage to other goods or sectors.

The study is analytical. It does not change the current CBAM scope, create a new evidence route or announce an adopted electricity methodology.

Why default-factor design is difficult

The study compares possible approaches to indirect-emissions default factors. It uses five criteria: environmental integrity, representativeness, data availability, conservativeness and administrative feasibility.

A broad country or grid average is easier to operate. A more selective factor separates electricity sources better, but it demands more data and stronger governance.

The study also highlights the risk of resource shuffling. Here, market participants assign cleaner electricity to reported production, while the wider physical emissions outcome does not change.

For this reason, updating and governance matter in the analysis. A default factor is more than a number, because its geographic basis, time period, data source and version can all influence incentives. Systems should therefore not hard-code any study option as an established rule.

What actual indirect-emissions claims might need

For direct technical links, the study discusses several evidence elements:

• physical connectivity;
• traceable electricity flows;
• technical documentation;
• interval or smart metering;
• time-matched data;
• linked contracts.

It also discusses verification that can reconcile flows, losses and claims.

For power purchase agreements (PPAs), the analysis separates physical arrangements from financial or virtual ones. It considers energy-attribute certificates, temporal and geographic correlation, additionality, exclusivity and controls against double claims.

The central question is whether a contractual claim matches the electricity used for production closely enough. The study does not set a new PPA test. It maps the evidence and integrity questions that policymakers would have to resolve before any different route could become law.

Extension is a scenario, not a rule

The study also examines whether indirect-emissions coverage could extend beyond the goods or sectors that CBAM covers now. It weighs carbon-leakage protection and parity with EU producers against data burden, verification cost and legal or administrative complexity.

The study discusses some phased or compensation-linked approaches as comparatively feasible policy options, but that is not an extension decision. Any change to scope would require legislation, and the study gives no basis for treating additional goods as covered today.

Keep current-law determinations separate from outlook work. A scenario register may note the study, but customs classification, scope decisions and declarations must still follow the law in force.

What it means for importers

Nothing in your current compliance changes. The study gives one practical lesson for preparation: keep electricity evidence in a structured form.

Producers can retain meter records, contracts, certificates, grid or source attribution, and the reconciliation between electricity use and production. Systems can keep physical electricity data separate from contractual environmental attributes, and record the version of the factor or method applied.

Procurement and sustainability teams should also record exclusivity and possible double counting. Do not assume that a certificate settles the emissions question. These steps improve the quality of your evidence, and they do not claim that a future option has been adopted.

What to do

• Review whether your data model can distinguish three things: physical consumption, contractual claims and the calculation parameter used.
• Track later legislation or formal proposals separately from current-law work.
• Use the study to test your readiness, not to rewrite current compliance rules.

Stuck on this in your own import data? Write to us and we will look at it with you.

This article summarises an analytical study. It is not legal, tax or customs advice.