How to Calculate Embedded Carbon Emissions for CBAM Reporting

CBAM requires exporters to report the embedded carbon in their goods. This guide explains the calculation methodology, data requirements, and the difference between actual and default emission values.

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

How to Calculate Embedded Carbon Emissions for CBAM Reporting

Accurate calculation of embedded carbon emissions is the foundation of CBAM compliance. This guide explains the methodology, data requirements, and practical steps for South African exporters.

What Are Embedded Carbon Emissions?

Under CBAM, embedded carbon emissions (also called "embodied carbon") are the greenhouse gas emissions generated during the production of a good, from raw material extraction to the point of export. CBAM covers:

▸Direct emissions (Scope 1) — CO₂ and other GHGs released directly from your production processes (e.g., burning fuel, chemical reactions)
▸Indirect emissions (Scope 2) — CO₂ from the electricity you consume in production

CBAM does not cover Scope 3 emissions (supply chain emissions beyond your direct control).

The Two Calculation Methods

Method 1: EU Default Values

The EU has published default embedded carbon values for each CBAM sector. These are conservative estimates designed to ensure that importers who cannot provide verified actual data still pay an appropriate carbon price.

| Sector | EU Default (tCO₂/tonne) | |--------|------------------------| | Steel & Iron | 2.18 | | Aluminium | 12.4 | | Cement | 0.87 | | Fertilisers | 2.85 | | Hydrogen | 10.9 |

Method 2: Verified Actual Emissions

If you can demonstrate that your actual embedded emissions are lower than the EU default, you can submit verified actual data. This requires:

▸A systematic emissions inventory covering all Scope 1 and Scope 2 sources
▸Third-party verification by an accredited verifier
▸Submission of the verified data with your CBAM declaration

Step-by-Step Calculation Process

Step 1: Define your system boundary Identify all production processes that contribute to the embedded carbon of your exported goods, from raw material inputs to finished product.

Step 2: Collect activity data Gather data on:

▸Fuel consumption (by type) in each process
▸Electricity consumption in each process
▸Process emissions (e.g., CO₂ from calcination in cement production)
▸Quantities of precursor materials and their embedded carbon

Step 3: Apply emission factors Convert activity data to CO₂ equivalents using appropriate emission factors:

▸Fuel combustion: use IPCC default emission factors or measured values
▸Electricity: use the national grid emission factor (South Africa: ~0.9 kgCO₂/kWh)
▸Process emissions: use stoichiometric calculations or measured values

Step 4: Calculate specific embedded emissions Divide total embedded emissions by total production volume to get the specific embedded emission rate (tCO₂/tonne of product).

Step 5: Apply to export volumes Multiply the specific embedded emission rate by your annual EU export volume to get total embedded emissions subject to CBAM.

The CBAM Calculator

Use the CBAM Calculator on this site to estimate your CBAM liability using EU default values. For a more precise calculation using your actual emission data, engage a CBAM compliance specialist through the Digital Product Passport Registry.

Frequently Asked Questions

What are embedded carbon emissions for CBAM purposes?

Embedded carbon emissions (also called 'embedded emissions' or 'embodied carbon') are the greenhouse gas emissions generated during the production of a good, including direct process emissions (Scope 1) and indirect emissions from electricity consumption (Scope 2). CBAM uses the term 'embedded emissions' to cover both direct and indirect emissions up to the point of export.

Can I use EU default emission values instead of calculating my own?

Yes. The EU has published default emission values for each CBAM sector. You can use these defaults without submitting verified actual data. However, if your actual emissions are lower than the default, using actual data will reduce your CBAM liability.

What is the difference between Scope 1 and Scope 2 emissions for CBAM?

Scope 1 emissions are direct emissions from your production process (e.g., burning fuel in a furnace). Scope 2 emissions are indirect emissions from the electricity you consume. CBAM covers both Scope 1 and Scope 2 emissions.

How do I account for precursor materials in CBAM calculations?

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

Do I need to calculate emissions for every shipment?

No. CBAM declarations are submitted annually, covering all imports during the previous calendar year. You calculate the total embedded emissions for all your EU exports in a given year and surrender CBAM certificates accordingly.

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