Short answer: embedded emissions are the direct emissions released while goods are produced plus the indirect emissions of the electricity consumed in production. The result of the calculation is the specific embedded emissions: the emissions attributed to the production process divided by the quantity produced in the period. The emissions of purchased precursors are added.
Your EU customer asks for one figure, embedded emissions per tonne, but a full year of installation data sits behind it. This article explains the CBAM calculation from the text of Regulation (EU) 2023/956 and Implementing Regulation (EU) 2025/2547 on the calculation methods. It gives no numerical example. The information was read from the sources on 13 October 2026.
What are embedded emissions?
Embedded emissions are the direct emissions released during the production of goods and the indirect emissions from producing the electricity consumed in the production processes (2023/956 Art. 3(22)). The unit is the tonne of CO2e (Art. 3(23)). The calculation follows the methods in Annex IV and the rules of 2025/2547 (Art. 7(1)).
The definition is limited to production: emissions means the release of greenhouse gases from the production of goods (Art. 3(3)). The calculation therefore looks at the production processes in the installation and the precursors that go into them.
What are direct and indirect emissions?
- Direct emissions: emissions from the production processes, including the production of heating and cooling consumed in them, wherever it is produced (Art. 3(21)).
- Indirect emissions: emissions from producing the electricity consumed in the production processes, wherever it is produced (Art. 3(34)).
Not every product needs both. For goods listed in Annex II (iron and steel, aluminium, hydrogen, electricity) only direct emissions count (Art. 7(1)). For goods not listed there, such as cement and fertilisers, indirect emissions are added (2025/2547 Art. 3(2)).
What are simple goods, complex goods and precursors?
Simple goods are produced using only input materials and fuels that have zero embedded emissions. All other goods are complex goods (2023/956 Annex IV, point 1(a) and 1(b)).
A precursor is an input material that is itself on the list of goods in Annex I (2025/2547 Art. 1(7)). If you buy billets and make profiles, the billet is the precursor and the profile is a complex good. The precursor's embedded emissions enter the calculation of the complex good. A precursor from the Union or from a country exempted under Annex III counts as zero (2025/2547 Annex III, part B).
How are specific embedded emissions (SEE) calculated?
Specific embedded emissions are the embedded emissions of one tonne of goods, expressed as tonnes of CO2e per tonne of goods (2023/956 Annex IV, point 1(c)). The calculation runs in these steps:
| Step | What is done | Source |
|---|---|---|
| 1. Attributed emissions | The share of the installation's emissions caused by the process producing the goods. Direct and indirect emissions are attributed separately. Heat flows and waste gases between processes are corrected to avoid double counting. A negative result for direct emissions is set to zero. | 2023/956 Annex IV, point 2; 2025/2547 Annex III, A.3 |
| 2. Activity level | The quantity of goods produced within the system boundaries of the process during the reporting period. | 2025/2547 Art. 1(2) |
| 3. SEE of simple goods | Attributed emissions divided by the activity level. | 2023/956 Annex IV, point 2 |
| 4. SEE of complex goods | Precursor emissions are added to the attributed emissions before dividing by the activity level. The precursor term is the sum of mass used times each precursor's own SEE. | 2023/956 Annex IV, point 3; 2025/2547 Annex III, part B |
The unit, called the "functional unit", is as a rule the tonne of goods under the same CN code. For electricity it is the kWh; for some fertilisers the kilogram of nitrogen contained, and for some cement codes the tonne of clinker contained (2025/2547 Art. 4(2) to 4(5)). For goods imported in 2026 the reporting period is the year 2026 (2025/2547 Art. 7(1)).
A precursor's SEE comes from the installation where it was produced, provided its data can be adequately measured (2023/956 Annex IV, point 3). Where precursors under one CN code come from several installations, the weighted average applies by default (2025/2547 Art. 14(2)).
What do system boundary and production process mean?
The system boundary is the group of chemical or physical processes included in the calculation for goods under the same aggregated goods category (2025/2547 Art. 1(3)). Boundaries are defined per category in Annex I to 2025/2547 (Art. 3(1)). The purchase and maintenance of infrastructure and equipment are excluded (Annex I, point 3.1).
The operator identifies the production processes so that inputs, outputs and emissions can be monitored and attributed to the goods (2025/2547 Art. 4(1)). Goods with the same functional unit made by different production routes in the installation fall under one single production process (Art. 4(6)). The operator designs a monitoring plan, submitted in English (Art. 5(5), 5(6)).
Should you use actual values or default values?
Embedded emissions are determined either from actual emissions or by reference to default values (2023/956 Art. 7(2)). Actual emissions are calculated from primary data of the production processes (Art. 3(28)). A default value is drawn from secondary data (Art. 3(27)) and set at the average emission intensity of the exporting country, increased by a mark-up (Annex IV, point 4.1).
| Sector | 2026 | 2027 | 2028 onwards |
|---|---|---|---|
| Cement, iron and steel, aluminium, hydrogen | 10 % | 20 % | 30 % |
| Fertilisers | 1 % | 1 % | 1 % |
The mark-ups are in Annex I to Implementing Regulation (EU) 2025/2621, as corrected by 2026/1740. The routes can be combined: actual emissions for your own processes and default values for one or more precursors (2025/2547 Art. 15).
For indirect emissions, default values are the rule. Actual values require a direct technical link to the electricity generation source or a power purchase agreement with an electricity producer (2023/956 Art. 7(4), Annex IV point 6).
Can the CBAM calculation be done in Excel?
Yes. The calculation is rule based; its steps and equations are in the regulations. The Commission also publishes an Excel communication template for installations. The version we hold is 2.1.1, dated 13 December 2024, which predates the methodology regulation for the definitive period.
The hard part is not the arithmetic but showing what stands behind each figure. Where actual emissions are used, the operator prepares an emissions report and a summary, with the content listed in Annex IV to 2025/2547, in English (2025/2547 Art. 10(1), 10(4)). Records must be detailed enough for a verifier to verify the embedded emissions (2023/956 Art. 10(6)). In a spreadsheet you have to show separately which invoice, meter or stock count each figure comes from, which rule was applied, and that it has not changed since. A small single-process installation can keep this by hand. With more processes, precursors and suppliers, the trail takes more effort than the calculation.
Who verifies the calculation?
Where actual emissions are used, the total declared must be verified by an accredited verifier (2023/956 Art. 8(1), Art. 18). That article does not require verification for default values. The verifier must find with reasonable assurance that the report is free of material misstatements and non-conformities (Annex VI, point 1(b)).
- Installation visits are mandatory as a rule (Annex VI, point 1(c)). A virtual visit requires a physical visit in the preceding reporting period; a waiver requires physical visits in two preceding periods. Neither is possible after significant changes to the installation or its monitoring plan (2025/2546 Art. 3(1)).
- The materiality level is 5 % of the total specific embedded emissions per tonne of the good, by CN code, and 5 % of the specific embedded free allocation (2025/2546 Art. 5(1)).
The verified figure determines how many certificates your customer surrenders: see CBAM certificate price. For the file that goes to your customer, see the CBAM report for producers.
The Registamp CBAM module runs these steps from your installation records: it links each data point to its evidence, calculates specific embedded emissions per product and keeps the calculation trail. See the CBAM module page.
This article is general information, not legal advice. For your own case, refer to the regulations and, where needed, a specialist.
Sources
- Regulation (EU) 2023/956, CBAM (consolidated text of 20 October 2025): eur-lex.europa.eu/eli/reg/2023/956/oj
- Implementing Regulation (EU) 2025/2547 on the methods for calculating embedded emissions: eur-lex.europa.eu/eli/reg_impl/2025/2547/oj
- Implementing Regulation (EU) 2025/2546 on the application of the verification principles: eur-lex.europa.eu/eli/reg_impl/2025/2546/oj
- Delegated Regulation (EU) 2025/2551 on the accreditation of verifiers: eur-lex.europa.eu/eli/reg_del/2025/2551/oj
- Implementing Regulation (EU) 2025/2621 on default values: eur-lex.europa.eu/eli/reg_impl/2025/2621/oj; correction 2026/1740: eur-lex.europa.eu/eli/reg_impl/2026/1740/oj
- European Commission, CBAM legislation and guidance page (communication template for installations): taxation-customs.ec.europa.eu