Embedded Carbon in Steel: CBAM Requirements, Default Values, and EAF vs BF-BOF
Steel CBAM default: 2.18 tCO2/t. Modern EAF actual: 0.40–0.80 tCO2/t. At EUR 65.42/tCO2, documenting actual values saves EUR 89–115 per tonne — EUR 8.9–11.5 million per year on 100,000 tonnes.
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| Production route | EU Default (tCO2/t) | Typical actual range (tCO2/t) | Saving per tonne at EUR 65.42 | Annual saving on 100,000t |
|---|---|---|---|---|
| BF-BOF (blast furnace) | 2.18 | 1.60–2.00 | EUR 11.77–37.94 | EUR 1.2–3.8M |
| EAF — coal grid (SA, India) | 2.18 | 0.70–1.20 | EUR 63.71–95.51 | EUR 6.4–9.6M |
| EAF — mixed grid (Turkey, Brazil) | 2.18 | 0.45–0.75 | EUR 94.36–112.98 | EUR 9.4–11.3M |
| EAF — clean grid (Norway, hydro) | 2.18 | 0.15–0.35 | EUR 118.21–131.09 | EUR 11.8–13.1M |
| DRI (gas-based, UAE/India) | 2.18 | 0.80–1.40 | EUR 50.73–88.67 | EUR 5.1–8.9M |
Which Steel Products Are Covered by CBAM?
CBAM Regulation 2023/956 Annex I covers a comprehensive range of iron and steel products. The key CN codes include:
| Product | CN code range |
|---|---|
| Pig iron | 7201 |
| Direct reduced iron (DRI) | 7203 |
| Ferro-alloys | 7202 |
| Iron and steel powders | 7205 |
| Flat-rolled products — hot-rolled | 7208, 7211 |
| Flat-rolled products — cold-rolled | 7209, 7212 |
| Bars and rods | 7213, 7214, 7215 |
| Wire | 7217 |
| Tubes, pipes, hollow profiles | 7304, 7305, 7306 |
| Stainless steel flat-rolled | 7219, 7220 |
EAF vs BF-BOF: Why the Production Route Matters
The EU default of 2.18 tCO2/t applies to all steel regardless of production route. This creates a large opportunity for EAF producers whose actual emissions are typically 60–80% lower than the default. BF-BOF producers have less to gain from actual value documentation because their actual emissions are closer to the default.
The key driver of EAF embedded carbon is the electricity grid emission factor of the country of production. An EAF producer in South Africa uses Eskom's grid (approximately 0.90 tCO2/MWh — one of the highest in the world due to coal dominance). An EAF producer in Turkey uses a more diversified grid (approximately 0.45 tCO2/MWh). An EAF producer in Norway using hydroelectric power achieves near-zero indirect emissions.
Country-Specific CBAM Exposure for Steel
| Country | Primary route | Grid factor (tCO2/MWh) | Typical actual (tCO2/t) | CBAM saving vs default | Country guide |
|---|---|---|---|---|---|
| Turkey | EAF (dominant) | 0.45 | 0.50–0.70 | EUR 96–110/t | Turkey CBAM → |
| South Africa | BF-BOF + EAF | 0.90 | 0.70–1.80 | EUR 25–95/t | SA CBAM → |
| India | BF-BOF + EAF + DRI | 0.82 | 0.80–2.00 | EUR 12–91/t | India CBAM → |
| China | BF-BOF (dominant) | 0.58 | 1.80–2.10 | EUR 5–25/t | China CBAM → |
| Brazil | BF-BOF + EAF | 0.09 | 0.20–1.80 | EUR 25–128/t | Brazil CBAM → |
| UAE | EAF + DRI | 0.40 | 0.50–1.20 | EUR 64–110/t | UAE CBAM → |
Frequently Asked Questions
What is the CBAM default emission value for steel?
The EU CBAM default for steel is 2.18 tCO2 per tonne, set at the 90th percentile of EU production emissions. This applies to all steel products regardless of production route.
What is the actual embedded carbon for EAF steel?
Modern EAF steel typically achieves 0.40–0.80 tCO2 per tonne depending on scrap quality, electricity grid emission factor, and process efficiency.
Which steel products are covered by CBAM?
CBAM covers pig iron, DRI, flat-rolled products, bars, rods, wire, tubes, pipes, and hollow profiles. Full CN code list in Annex I of Regulation 2023/956.
Does CBAM apply to South African steel exports to the EU?
Yes. South Africa is a significant steel exporter to the EU. CBAM applies to all steel imports regardless of country of origin.
How is indirect electricity emission calculated for EAF steel?
Indirect emissions = Electricity consumed (MWh) × National grid emission factor (tCO2/MWh). For South Africa: ~0.90 tCO2/MWh. For Turkey: ~0.45 tCO2/MWh.
Does CBAM apply to DRI (direct reduced iron)?
Yes. DRI is explicitly covered in Annex I of CBAM Regulation 2023/956 under CN code 7203. DRI producers in India, Iran, and the UAE face full CBAM exposure on EU exports.
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