CBAM Embedded Carbon Calculation Methods: Actual vs Default Emission Values

The Two Calculation Methods — A Direct Comparison

Why Actual Emissions Are Better Than Defaults

EU default emission values are set at the 90th percentile of EU production emissions. This means the EU Commission has looked at all steel, aluminium, cement, fertiliser, and hydrogen production facilities in the EU, ranked them from cleanest to dirtiest, and set the default at the level of the dirtiest 10%. The assumption embedded in the default is that your facility is dirtier than 90% of European facilities.

For most non-EU manufacturers using modern equipment — particularly EAF steel producers, secondary aluminium producers, and modern ammonia plants — this assumption is wrong. Modern EAF steel production achieves 0.40–0.80 tCO2 per tonne. The EU default of 2.18 tCO2 per tonne assumes blast furnace-level emissions. The financial gap is not marginal — it is the difference between a viable export business and one that is priced out of the EU market by its own compliance costs.

CBAM Default Emission Values by Sector

How to Calculate Actual Embedded Carbon

The actual embedded carbon calculation requires four categories of data, all of which must be collected over a minimum monitoring period of 60 continuous days within the reporting year.

Data Inputs Required

The Calculation Formula

The embedded carbon intensity (tCO2e per tonne of product) is calculated as:

The 60-Day Production History Rule

CBAM Implementing Regulation 2023/1570 requires that actual emission values be based on a minimum of 60 days of continuous production monitoring. This requirement exists to ensure the calculation represents normal operating conditions rather than a cherry-picked period of unusually low emissions. The 60-day period must fall within the CBAM reporting year (calendar year for most sectors).

In practice, most manufacturers collect data for the full calendar year and present annual averages to their verifier. The 60-day minimum is a floor, not a ceiling. Annual data is preferred because it captures seasonal variation in production intensity, fuel mix, and electricity grid emission factors.

Third-Party Verification Requirement

Actual emission values cannot be self-declared. CBAM Implementing Regulation 2023/1570 Article 8 requires that actual embedded carbon calculations be validated by an accredited verifier — a body holding ISO 14065 accreditation from the national accreditation body of the country where the verifier operates. The verifier conducts a site visit, reviews the data collection methodology, checks the calculation, and issues a verification statement confirming the tCO2e per tonne figure.

The verification statement is the document you upload to embeddedcarbonrecord.com. It is the proof that your calculation has been independently validated. Without it, your actual emission values cannot be used for CBAM purposes — the EU importer must fall back to default values.

For a full guide to the verification process, including accreditation bodies by country and cost ranges, see CBAM Third-Party Verification →.

Mass Balance vs Physical Segregation

For manufacturers with mixed production lines — where inputs from multiple sources are blended or where the same facility produces goods for both CBAM-covered and non-CBAM-covered markets — CBAM Implementing Regulation 2023/1570 allows two allocation approaches:

• Physical segregation: Inputs and outputs for CBAM-covered goods are physically tracked separately from non-CBAM goods. This is the preferred approach where operationally feasible.
• Mass balance allocation: Where physical segregation is not possible, emissions are allocated to CBAM-covered goods in proportion to their share of total production volume. The verifier must confirm the allocation methodology is appropriate and consistently applied.

The choice of allocation method must be documented and disclosed to the verifier. Changing allocation methods between reporting years requires justification and may require re-verification of prior year data.

Storing Your Verified Calculation

Once your verifier has issued the verification statement, you must store it in a way that allows your EU buyer to access it on demand and allows CBAM authorities to audit it for up to three years after the import date. A verification statement stored only on your own server creates three risks: server downtime, data loss, and inability to prove the document existed on a specific date and has not been altered.

embeddedcarbonrecord.com solves all three. The SHA-256 hash of your verification statement is computed in your browser and stored permanently on dual Cloudflare and Google Cloud Storage infrastructure. The permanent verification URL resolves in under 2 seconds. The hash timestamp proves the document existed on a specific date and has not been altered since — the forensic standard EU customs recognises.