Embedded Carbon Record for CBAM Compliance: Glossary of Terms

A–Z Glossary

Actual Embedded Carbon

The verified greenhouse gas emissions per tonne of product, calculated using the manufacturer's actual production data and an ISO 14067-compliant methodology, expressed in tCO₂e/t. Contrasted with default values.

Attribution Factor

The fraction of a precursor material's embedded carbon allocated to a specific product when a production process generates multiple outputs. Defined in CBAM Implementing Regulation 2023/1570 Annex III.

Authorised CBAM Declarant

An EU-registered importer authorised by a national competent authority to submit CBAM declarations and purchase CBAM certificates. Only authorised declarants may import CBAM-covered goods from January 2026.

CBAM (Carbon Border Adjustment Mechanism)

EU Regulation 2023/956 establishing a carbon price on imports of goods from outside the EU where the production process generates greenhouse gas emissions. Financial enforcement began January 1, 2026. First certificate surrender: September 30, 2027.

CBAM Certificate

A digital certificate purchased by an authorised CBAM declarant corresponding to one tonne of CO₂ equivalent of embedded carbon in imported goods. Price is linked to the weekly average EU ETS auction price.

CBAM Declaration

The annual declaration submitted by an authorised CBAM declarant to their national competent authority by May 31 of each year, reporting the quantity and embedded carbon of imported goods and surrendering the corresponding CBAM certificates.

CN Code (Combined Nomenclature)

The EU's 8-digit tariff classification code. CBAM coverage is determined by CN code. Manufacturers must identify the correct CN code for their products to determine CBAM applicability.

Cradle-to-Gate

The system boundary for embedded carbon calculations under CBAM. Includes all emissions from raw material extraction (cradle) through to the factory gate, excluding transport to the customer. Defined in ISO 14067.

Default Values

Emission values set by the EU Commission at the 90th percentile of EU production emissions for each CBAM-covered product. Applied when a non-EU manufacturer cannot provide verified actual values. Default values are typically 2–5× higher than actual values for modern facilities.

Direct Emissions

Greenhouse gas emissions from combustion and process reactions within the production facility boundary (Scope 1). Included in CBAM calculations for all covered sectors.

Embedded Carbon

See Actual Embedded Carbon. Also called embodied carbon, cradle-to-gate emissions, or product carbon footprint. Expressed in tCO₂e per tonne of product.

EU ETS (Emissions Trading System)

The EU's cap-and-trade carbon pricing mechanism. CBAM certificate prices are linked to the weekly average EU ETS auction price. Current price: approximately EUR 65/tCO₂.

Functional Unit

The reference unit to which embedded carbon is expressed. Under CBAM, the functional unit is one tonne of product (tCO₂e/t). Defined in ISO 14067.

Indirect Emissions

Greenhouse gas emissions from electricity consumption (Scope 2). Included in CBAM calculations for aluminium, fertilisers, and electricity. Not included for steel, cement, or hydrogen from combustion processes.

ISO 14064

International standard for quantification and reporting of greenhouse gas emissions at the organisation or project level. Relevant for facility-level GHG inventories but not the primary calculation standard for CBAM product-level calculations.

ISO 14065

International standard for the accreditation of greenhouse gas validation and verification bodies. Under CBAM, third-party verifiers must hold ISO 14065 accreditation (or equivalent national accreditation) to produce accepted verification reports.

ISO 14067

International standard for the quantification and reporting of the carbon footprint of products (cradle-to-gate). The primary calculation methodology accepted under CBAM for product-level embedded carbon.

O3CI (Operator Third Country Installation)

The EU Commission's official data sharing portal at cbam.ec.europa.eu. Non-EU manufacturers can register and share their embedded carbon data directly with EU declarants via the portal. Complementary to, not a replacement for, third-party verification and permanent storage.

Precursor

A material used as an input in the production of a CBAM-covered good, where the precursor itself carries embedded carbon that must be included in the finished product's CBAM calculation. Example: iron ore pellets as a precursor to steel.

Reporting Period

The calendar year for which embedded carbon data is reported. CBAM declarations cover the preceding calendar year. The first full reporting period is January–December 2026.

SHA-256 Hash

A cryptographic hash function that produces a unique 64-character fingerprint of any document. Used by embeddedcarbonrecord.com to create a tamper-evident proof of a verification document without transmitting the document itself. If a single character in the document changes, the hash changes completely.

Specific Embedded Carbon

The embedded carbon per unit of product, expressed as tCO₂e/t. The primary metric in CBAM calculations. Also called the carbon intensity or emission intensity of a product.

System Boundary

The defined scope of processes included in an embedded carbon calculation. Under CBAM, the system boundary is cradle-to-gate: from raw material extraction to the factory gate of the exporting manufacturer.

Third-Party Verification

Independent assessment of an embedded carbon calculation by an ISO 14065 accredited verification body. Required under CBAM for manufacturers wishing to use actual values instead of EU default values.

Transitional Period

October 2023 – December 2025. During this period, CBAM reporting was required but no certificates were purchased. Financial enforcement began January 1, 2026.

Verification Report

The formal document produced by an ISO 14065 accredited verifier confirming the accuracy of an embedded carbon calculation. Must include the verifier's accreditation details, methodology applied, data reviewed, and a verification opinion (reasonable assurance or limited assurance).