Embedded Carbon by Sector: CBAM Requirements for Steel, Aluminium, Cement, Fertilisers and Hydrogen

Sector Overview — Default Values, Complexity, and Financial Exposure

Iron and Steel — The Highest Volume CBAM Sector

Iron and steel is the largest CBAM sector by import volume into the EU. The sector covers a wide range of products from primary pig iron and direct reduced iron through to finished flat-rolled products, bars, rods, wire, tubes, and pipes. The EU default value of 2.18 tCO2 per tonne applies to all steel products regardless of production route — blast furnace or electric arc furnace — which creates a significant opportunity for EAF producers whose actual emissions are typically 0.40–0.80 tCO2 per tonne.

Turkey is the EU's largest steel supplier and faces the highest absolute CBAM exposure of any non-EU country. India, China, South Africa, and Brazil are also major steel exporters to the EU. For country-specific CBAM context, see the Verifier Directory and country pages.

Full steel embedded carbon guide →

Aluminium — The Highest Default Value Sector

Primary aluminium has the highest EU default emission value of any CBAM sector at 12.40 tCO2 per tonne, reflecting the extreme electricity intensity of aluminium smelting via the Hall-Héroult electrolysis process. A primary aluminium smelter using hydroelectric power can achieve actual embedded carbon of 2.00–4.00 tCO2 per tonne — a saving of EUR 548–680 per tonne at current ETS prices compared to the default. At 50,000 tonnes of exports, that is EUR 27–34 million per year.

Secondary aluminium (scrap-based production) has dramatically lower actual emissions — typically 0.30–0.80 tCO2 per tonne — making the gap between default and actual even larger for secondary producers. The UAE, China, India, and Norway are major aluminium exporters to the EU.

Full aluminium embedded carbon guide →

Cement — Process Emissions Dominate

Cement has the lowest absolute default value (0.81 tCO2 per tonne of clinker) but the highest proportion of unavoidable process emissions of any CBAM sector. Approximately 60% of cement's embedded carbon comes from the calcination of limestone — a chemical reaction that releases CO2 regardless of the energy source used. This means the gap between default and actual values is smaller for cement than for steel or aluminium, but still meaningful for large-volume exporters.

The EU default of 0.81 tCO2/t assumes average EU clinker production. Modern cement plants with alternative fuel substitution and efficient kiln technology can achieve 0.60–0.70 tCO2/t. At 100,000 tonnes of clinker exports, that is EUR 655,000–1,310,000 per year in potential savings.

Full cement embedded carbon guide →

Fertilisers — Ammonia Is the Key Calculation

The fertiliser sector under CBAM is anchored by ammonia — the feedstock for virtually all nitrogen fertilisers. The embedded carbon of ammonia (2.326 tCO2/t default) flows through to urea, ammonium nitrate, and mixed fertilisers. A modern natural gas-based ammonia plant achieves 1.60–2.00 tCO2/t actual. An older plant using coal gasification may exceed the default. India is the world's second-largest ammonia producer and a significant EU fertiliser supplier — with no domestic carbon pricing, Indian producers face full CBAM exposure.

Full fertilisers embedded carbon guide →

Hydrogen — The Sector With the Largest Actual-to-Default Gap

Hydrogen has a default value of 5.28 tCO2 per tonne based on steam methane reforming (SMR) — the dominant production route globally. Green hydrogen produced via electrolysis using renewable electricity has actual embedded carbon of 0.00–0.50 tCO2 per tonne. The gap between default and actual for a green hydrogen producer is 4.78–5.28 tCO2 per tonne — at EUR 65.42/tCO2, that is EUR 312–345 per tonne. For a 10,000-tonne green hydrogen exporter, documenting actual values saves EUR 3.1–3.4 million per year.

Full hydrogen embedded carbon guide →