CBAM and Scope 3 Emissions: What's In and What's Out

CBAM covers Scope 1 and Scope 2 emissions but not Scope 3. This guide explains the boundary between what's included in CBAM calculations and what's excluded.

Published April 2026·Last updated April 2026·carbonborderadjustment.co.za

CBAM and Scope 3 Emissions: What's In and What's Out

Understanding the emission boundary for CBAM is essential for accurate compliance calculations. CBAM uses a specific "cradle to gate" boundary that includes some but not all emissions associated with your products.

The CBAM Emission Boundary

CBAM covers embedded emissions — the greenhouse gas emissions generated during the production of a good, from raw material extraction to the point of export. The boundary includes:

Included (Scope 1 — Direct Emissions):

▸Fuel combustion in production processes (furnaces, kilns, boilers)
▸Process emissions from chemical reactions (e.g., CO₂ from calcination in cement)
▸Fugitive emissions from production equipment

Included (Scope 2 — Indirect Electricity Emissions):

▸CO₂ from the electricity consumed in production
▸Calculated using the national grid emission factor or the emission factor of your specific electricity source

Included (Precursor Materials):

▸Embedded emissions in raw materials and intermediate inputs used in production
▸For example, the embedded carbon in iron ore and coke used in steelmaking

Excluded (Scope 3):

▸Upstream supply chain emissions beyond direct inputs (e.g., mining equipment manufacturing)
▸Transport emissions (shipping goods to the EU)
▸Downstream use-phase emissions
▸End-of-life disposal emissions

The Cradle-to-Gate Boundary

CBAM uses a "cradle to gate" emission boundary, which means:

▸Cradle — The point at which raw materials are extracted from the ground
▸Gate — The point at which the finished product leaves your production facility for export

Everything between the cradle and the gate is included in CBAM calculations. Everything after the gate (transport, use, disposal) is excluded.

Practical Implications for SA Exporters

Steel producers: Include emissions from iron ore mining, coking coal processing, blast furnace operation, and steelmaking. Exclude transport to the port.

Aluminium smelters: Include emissions from bauxite mining, alumina refining, and aluminium smelting. Exclude transport to the port.

Cement producers: Include emissions from limestone quarrying, clinker production (including calcination), and cement grinding. Exclude transport to the port.

CBAM vs DPP Emission Boundaries

If you are completing both CBAM and DPP compliance, note that the DPP typically requires a broader emission boundary:

| Emission Type | CBAM | DPP | |---------------|------|-----| | Scope 1 (direct) | Required | Required | | Scope 2 (electricity) | Required | Required | | Scope 3 upstream | Partial (precursors only) | Often required | | Transport emissions | Not required | Often required | | Use-phase emissions | Not required | Often required |

Collecting the additional data required for DPP compliance while you are already collecting CBAM data is the most efficient approach.

For a complete CBAM compliance registration pathway, visit the Digital Product Passport Registry.

Frequently Asked Questions

Does CBAM cover Scope 3 emissions?

No. CBAM covers only Scope 1 (direct process emissions) and Scope 2 (indirect emissions from electricity) emissions. Scope 3 emissions — including upstream supply chain emissions and downstream use-phase emissions — are not included in CBAM calculations.

What is the difference between Scope 1, 2, and 3 emissions?

Scope 1 emissions are direct emissions from your own production processes (e.g., burning fuel in a furnace). Scope 2 emissions are indirect emissions from the electricity you purchase. Scope 3 emissions are all other indirect emissions in your value chain, including supplier emissions and customer use-phase emissions.

Are transport emissions included in CBAM?

No. Transport emissions (from shipping goods to the EU) are not included in CBAM calculations. CBAM covers only the embedded emissions in the production of the goods, not the emissions from transporting them.

Are precursor material emissions included in CBAM?

Yes. CBAM uses a 'cradle to gate' approach that includes the embedded emissions of precursor materials. For example, the embedded carbon in steel includes the emissions from producing the iron ore and coke used as inputs, not just the steelmaking process itself.

How does the CBAM emission boundary compare to the Digital Product Passport?

The DPP typically requires a broader emission boundary than CBAM, including some Scope 3 emissions. If you are completing both CBAM and DPP compliance, you will need to collect additional data beyond the CBAM scope for your DPP.

Gate 3 — Complete Registration

✓ Gate 1 KYC · ✓ Gate 2 CBAM · Gate 3 DPP →

Digital Product Passport Registry

Complete all three compliance gates — Gate 1 KYC identity verification, Gate 2 CBAM financial authorisation, and Gate 3 Digital Product Passport registration — in one place at the DPP Registry.

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