Under CBAM, cement and fertilisers count both direct and indirect emissions in their default values, as does agglomerated iron ore (CN 2601 12 00). Other iron and steel goods, aluminium and hydrogen count direct emissions only. Indirect emissions come from the electricity used in production. For the direct-only goods, the grid behind the plant stays out of the embedded total, apart from a sintered ore precursor in steel.
Two of the six covered CBAM product groups count indirect emissions in their default values: cement and fertilisers. So does one iron and steel good, agglomerated iron ore (CN 2601 12 00). All other iron and steel goods, aluminium and hydrogen count direct emissions only. The sixth group, electricity, is itself the power product, so its embedded emissions are the emissions of generating it rather than an indirect add-on from purchased power.
Direct and indirect, defined
Embedded emissions split into two parts. Direct emissions come from the production process itself, such as the calcination of limestone and the fuel burned in a cement kiln, or the natural-gas feedstock behind ammonia and urea. Indirect emissions come from the electricity drawn during production, mainly grinding in cement and process power in fertilisers. Whether the indirect part is recorded in the Annex I default total depends on the product group.
Which groups carry indirect emissions
| CBAM group | Emissions counted |
|---|---|
| Cement | Direct and indirect |
| Fertilisers | Direct and indirect |
| Iron and steel | Direct only, except agglomerated iron ore (CN 2601 12 00): direct and indirect |
| Aluminium | Direct only |
| Hydrogen | Direct only |
Why the boundary matters
The split is reflected in Implementing Regulation (EU) 2025/2621, whose Annex I default totals carry an indirect component only for the groups that count it:
- For cement and fertilisers, indirect emissions are part of the embedded figure. A cleaner power source lowers it only where actual indirect emissions are allowed, which needs a direct technical link or a power purchase agreement.
- For aluminium, hydrogen and iron and steel other than agglomerated iron ore, only direct emissions count. The plant’s grid choices leave the CBAM number unchanged, apart from a sintered ore precursor.
- Adding grid electricity to a direct-only good would inflate the declared value against a boundary the regulation does not set for that group.
The rule is set in Regulation (EU) 2023/956 itself. Annex II lists the goods counted on direct emissions only, and Article 7(1) says only direct emissions are calculated for them. Implementing Regulation (EU) 2025/2547 draws the monitoring boundary the same way, so the electricity used to make Annex II goods sits outside it. Agglomerated iron ore (CN 2601 12 00) is the exception in the iron and steel group. It is not in Annex II, and where it is a precursor of pig iron or direct reduced iron, its indirect emissions stay in the actual emissions of that steel.
Steel shows the effect. Electricity is the main energy input of an electric arc furnace melting scrap, and the emissions from generating it stay out of the steel’s CBAM figure. A blast furnace burns coke on site, so those emissions are direct and count. How the route changes the bill is covered in the production route answer.
CBAM compliance support covers guidance on declarant status and certificate obligations, and the preparation of embedded-emissions data, across each covered group. A CBAM guide sets the reporting boundary group by group, so the declaration covers only the parts a product must include.
Sources: Regulation (EU) 2023/956, consolidated · Implementing Regulation (EU) 2025/2547 · Implementing Regulation (EU) 2025/2621 · Implementing Regulation (EU) 2026/1740 · European Commission CBAM