Third-country Operators
Data Requests from Clients
If you are operating an installation that produces CBAM goods and is located outside of the EU —or outside of a country or territory exempt from the EU CBAM— be aware that you will eventually receive data requests. These requests will come from clients who are now subject to the new EU CBAM reporting obligations.
Clients of yours who are located in the EU, or in a country or territory exempt from the EU CBAM, will eventually reach out to you to request some data. These clients may also be traders who then sell your goods to other customers within the EU with CBAM reporting obligations.
If your client is located outside the EU, you may still receive CBAM-related data requests. This is likely if your client manufactures CBAM goods and your products are used as 'relevant precursors' for these goods.
I’m a Third-country Operator. What should I do next?
Let's take it one step at a time.
1. Identify whether you produce or use any CBAM goods
Calcined Clay
2507 00 80 – Other kaolinic clays
Cement clinker
2523 10 00 – Cement clinkers
Cement
2523 21 00 – White Portland cement, whether or not artificially coloured
2523 29 00 – Other Portland cement
2523 90 00 – Other hydraulic cements
Aluminous Cement
2523 30 00 – Aluminous cement
Unwrought aluminium
7601 – Unwrought Aluminium
Aluminium products
7603 – Aluminium powders and flakes
7604 – Aluminium bars, rods and profiles
7605 – Aluminium wire
7606 – Aluminium plates, sheets and strip, of a thickness exceeding 0,2 mm
7607 – Aluminium foil (whether or not printed or backed with paper, paper-board, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0,2 mm
7608 – Aluminium tubes and pipes
7609 00 00 – Aluminium tube or pipe fittings (for example, couplings, elbows, sleeves)
7610 – Aluminium structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminium plates, rods, profiles, tubes and the like, prepared for use in structures
7611 00 00 – Aluminium reservoirs, tanks, vats and similar containers, for any material (other than compressed or liquefied gas), of a capacity exceeding 300 litres, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment
7612 – Aluminium casks, drums, cans, boxes and similar containers (including rigid or collapsible tubular containers), for any material (other than compressed or liquefied gas), of a capacity not exceeding 300 litres, whether or not lined or heat- insulated, but not fitted with mechanical or thermal equipment
7613 00 00 – Aluminium containers for compressed or liquefied gas
7614 – Stranded wire, cables, plaited bands and the like, of aluminium, not electrically insulated
7616 – Other articles of aluminium
Sintered Ore
2601 12 00 – Agglomerated iron ores and concentrates, other than roasted iron pyrites
Pig Iron
7201 – Pig iron and spiegeleisen in pigs, blocks, or other primary forms – Some products under 7205 (Granules and powders, of pig iron, spiegeleisen, iron, or steel) may be covered here
Some products under 7205 (Granules and powders, of pig iron, spiegeleisen, iron, or steel) may be covered here
Ferro-alloy: FeMn
7202 1 – Ferro-manganese
Ferro-alloy: FeCr
7202 4 – Ferro-chromium
Ferro-alloy: FeNi
7202 6 – Ferro-nickel
DRI
7203 – Ferrous products obtained by direct reduction of iron ore and other spongy ferrous products
Crude Steel
7206 – Iron and non-alloy steel in ingots or other primary forms (excluding iron of heading 7203)
7207 – Semi-finished products of iron or non-alloy steel
7218 – Stainless steel in ingots or other primary forms; semi- finished products of stainless steel
7224 – Other alloy steel in ingots or other primary forms; semi- finished products of other alloy steel
Iron or steel products
7205 – Granules and powders, of pig iron, spiegeleisen, iron or steel (if not covered under category pig iron)
7208 – Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated
7209 – Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated
7210 – Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, clad, plated or coated
7211 – Flat-rolled products of iron or non-alloy steel, of a width of less than 600 mm, not clad, plated or coated
7212 – Flat-rolled products of iron or non-alloy steel, of a width of less than 600 mm, clad, plated or coated
7213 – Bars and rods, hot-rolled, in irregularly wound coils, of iron or non-alloy steel
7214 – Other bars and rods of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but including those twisted after rolling
7215 – Other bars and rods of iron or non-alloy steel
7216 – Angles, shapes and sections of iron or non-alloy steel
7217 – Wire of iron or non-alloy steel
7219 – Flat-rolled products of stainless steel, of a width of 600 mm or more
7220 – Flat-rolled products of stainless steel, of a width of less than 600 mm
7221 – Bars and rods, hot-rolled, in irregularly wound coils, of stainless steel
7222 – Other bars and rods of stainless steel; angles, shapes and sections of stainless steel
7223 – Wire of stainless steel
7225 – Flat-rolled products of other alloy steel, of a width of 600 mm or more
7226 – Flat-rolled products of other alloy steel, of a width of less than 600 mm
7227 – Bars and rods, hot-rolled, in irregularly wound coils, of other alloy steel
7228 – Other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel
7229 – Wire of other alloy steel
7301 – Sheet piling of iron or steel, whether or not drilled, punched or made from assembled elements; welded angles, shapes and sections, of iron or steel
7302 – Railway or tramway track construction material of iron or steel, the following: rails, check-rails and rack rails, switch blades, crossing frogs, point rods and other crossing pieces, sleepers (cross-ties), fish- plates, chairs, chair wedges, sole plates (base plates), rail clips, bedplates, ties and other material specialised for jointing or fixing rails
7303 – Tubes, pipes and hollow profiles, of cast iron
7304 – Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel
7305 – Other tubes and pipes (for example, welded, riveted or similarly closed), having circular cross-sections, the external diameter of which exceeds 406,4 mm, of iron or steel
7306 – Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel
7307 – Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel
7308 – Structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge- sections, lock- gates, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, balustrades, pillars and columns), of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel
7309 – Reservoirs, tanks, vats and similar containers for any material (other than compressed or liquefied gas), of iron or steel, of a capacity exceeding 300 l, whether or not lined or heat- insulated, but not fitted with mechanical or thermal equipment
7310 – Tanks, casks, drums, cans, boxes and similar containers, for any material (other than compressed or liquefied gas), of iron or steel, of a capacity not exceeding 300 l, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment
7311 – Containers for compressed or liquefied gas, of iron or steel
7318 – Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel
7326 – Other articles of iron or steel
Nitric acid
2808 00 00 – Nitric acid; sulphonitric acids
Urea
3102 10 – Urea, whether or not in aqueous solution
Ammonia
2814 – Ammonia, anhydrous or in aqueous solution
Mixed fertilizers
2834 21 00 – Nitrates of potassium
3102 – Mineral or chemical fertilisers, nitrogenous except 3102 10 (Urea)
3105 – Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus, and potassium; other fertilisers – Except: 3105 60 00 – Mineral or chemical fertilisers containing the two fertilising elements phosphorus and potassium
Hydrogen
2804 10 00 – Hydrogen
Electricity
2716 00 00 – Electrical energy
Where fewer than 8 digits appear, it means that all CN codes starting with those digits are covered.
Map your CN goods to their corresponding “aggregated goods categories”
Check out the number of CN Goods per “aggregated goods category”
A "CN good" refers to a product or item that is classified according to the Combined Nomenclature (CN). The CN code is an 8-digit classification system used within the European Union (EU) for the declaration of goods at customs and for statistical purposes. It builds upon the international Harmonized System (HS), which is a standardized 6-digit code used worldwide to identify products. The first 6 digits of the CN code are the HS subheading, providing a broader classification of the goods. The CN adds two extra digits to this HS subheading, creating a more detailed classification to meet specific EU requirements for customs, taxation, and trade statistics.
Under the EU's CBAM framework, each CN code is grouped into what is termed an "aggregated goods category". This grouping comprises various CBAM goods, which, despite having different CN codes, share similar characteristics that allow for the application of common monitoring rules. These categories are created to simplify the administration and implementation of CBAM. Your suppliers will use them to monitor and calculate their emissions, so it's helpful for you to become familiar with how they link to each CN good. In total, the EU CBAM currently encompasses 20 different aggregated goods categories.
Under the EU CBAM, "installation" is defined as a stationary technical unit where a production process is carried out.
Keep in mind that your installation's emissions are the starting point for determining CBAM embedded emissions at the product level.
The production process is the part of your installation where you carry out the chemical or physical processes to produce the goods falling under an aggregated goods category, taking into account the system boundaries regarding inputs, outputs and corresponding emissions.
The general rule is that one production process relates to one aggregated goods category. This means that if your installation produces more than one category of aggregated CBAM goods, you should split the installation into separate production processes to be able to perform separate monitoring and attribute emissions accordingly. However, you may also be able to define a joint production process for different aggregated goods categories, provided certain conditions are met. For example, if you produce crude steel and all the liquid pig iron from the blast furnace is used by the oxygen steelmaking process to produce the crude steel. Another example is if you operate an integrated cement plant and you use all the produced clinker for cement manufacturing at your facility.
Finally, keep in mind that if your installation employs different production routes within a same production process, you have the option to either define it as a single production process or establish separate production process system boundaries for each of the different routes.
The production route is the specific technology that you use in a production process to produce the goods falling under an aggregated goods category.
For instance, whether you produce pig iron through the blast furnace route or through the smelting reduction process.
The activity level is the total quantity of goods you produce within a production process.
2. Define your installation's system boundaries
You need to split your installation into production processes and its specified system boundaries for the purpose of monitoring emissions. The system boundaries are defined in Annex II of the CBAM Implementing Regulation.
Note that the CBAM regulation defines the system boundaries per production route, that is, for each specific technology used to produce the CBAM goods falling under a specific aggregated goods category. For instance, if you produce ammonia in your installation, the system boundaries are provided separately for the Haber-Bosch process with steam reforming of natural gas or biogas, and for the Haber-Bosch process with gasification of coal or other fuels. In addition, there are special provisions for most aggregated goods categories.
List of relevant precursors and GHGs
Relevant precursors in the context of the EU CBAM are goods with embedded emissions that serve as inputs for the production of other CBAM goods. Before calculating the specific embedded emissions of a CBAM good, it’s necessary to account for emissions from these relevant precursors. This step ensures the comparability of carbon costs under both the EU ETS and the EU CBAM.
CBAM goods with relevant precursors are referred to as “complex goods”. These complex goods can also be relevant precursors themselves. “Simple goods” refer to goods without relevant precursors, meaning they are produced in a process that exclusively requires input materials and fuels that under the EU CBAM are considered to have zero embedded emissions.
Calcined Clay
Relevant precursors: None
GHG: CO2
Cement clinker
Relevant precursors: None
GHG: CO2
Cement
Relevant precursors:
- Cement clinker
- Calcined clay
GHG: CO2
Aluminous Cement
Relevant precursors: None
GHG: CO2
Unwrought aluminium
Relevant precursors:
- None for primary aluminium
- For secondary aluminium, unwrought aluminium from other sources, if used in the process (excludes categories CN 7615 for certain household articles CN 7602 00 aluminium scrap)
GHG:
- CO2
- For primary unwrought aluminium: PFCs (CF4 and C2F6)
Aluminium products
Relevant precursors:
- Unwrought aluminium (differentiated between primary and secondary aluminium, if known)
- Other aluminium products (if used in the production process)
GHG:
- CO2
Sintered Ore
Relevant precursors: None
GHG: CO2
Pig Iron
Relevant precursors:
- Hydrogen
- Sintered ore
- Ferro alloys
- Pig iron | Direct Reduced Iron (DRI), if obtained from other installations and used in the process
GHG: CO2
Ferro alloys (FeMn, FeCr, FeNi)
Relevant precursors:
- Sintered ore, if used in the process
GHG: CO2
DRI
Relevant precursors:
- Hydrogen
- Sintered ore
- Ferro alloys
- Pig iron | DRI, if obtained from other installations or production processes and used in the process
GHG: CO2
Crude Steel
Relevant precursors:
- Ferro alloys,
- Pig iron
- DRI
- Crude steel, if obtained from other installations or production processes and used in the process
GHG: CO2
Iron or steel products
Relevant precursors:
- Ferro alloys,
- Pig iron
- DRI
- Crude steel, if obtained from other installations or production processes and used in the process
GHG: CO2
Ammonia
Relevant precursors:
- Hydrogen, if separately produced for use in the process
GHG: CO2
Nitric acid
Relevant precursors:
- Ammonia (as 100% ammonia)
GHG:
- CO2
- N2O
Urea
Relevant precursors:
- Ammonia (as 100% ammonia)
GHG: CO2
Mixed fertilizers
Relevant precursors, if used in the process:
- Ammonia (as 100% ammonia)
- Nitric acid (as 100% nitric acid)
- Urea
- Mixed fertilizers (in particular salts containing ammonium or nitrate)
GHG: CO2
Hydrogen
Relevant precursors: None
GHG: CO2
Electricity
Relevant precursors: None
GHG: CO2
Additional Qualifying Parameters
For some aggregated goods categories, the EU CBAM mandates the reporting of additional qualifying parameters. These parameters offer further insight into the quality of the CBAM goods you produce, thereby facilitating a better understanding of the emissions being reported.
For instance, if you produce cement, you need to report the clinker to cement ratio. Cement with a higher clinker ratio might have higher embedded emissions, given that clinker production, and more particularly limestone calcination, is a key driver of emissions in this industry.
Calcined Clay
- Whether the clay imported is calcined or not
Cement clinker
None
Cement
- The clinker to cement ratio expressed in percent
Aluminous Cement
None
Unwrought aluminium
- Tonnes scrap used for producing 1 tonne of the product
- Aluminium pre-consumer scrap
- Non-Aluminium content
Aluminium products
- Tonnes scrap used for producing 1 tonne of the product
- Aluminium pre-consumer scrap
- Non-Aluminium content
Sintered Ore
None
Pig Iron
- Main reducing agent
- Manganese content
- Chromium content
- Nickel content
- Content of other alloy elements
Ferro-manganese (FeMn)
- Manganese content
- Carbon content
Ferro-chromium (FeCr)
- Chromium content
- Carbon content
Ferro-nickel (FeNi)
- Nickel content
- Carbon content
DRI
- Reducing agent
- Manganese content
- Chromium content
- Nickel content
- Content of other alloy elements
Crude Steel
- Precursor reducing agent
- Manganese content
- Chromium content
- Nickel content
- Content of other alloy elements
- Steel scrap usage
- Steel pre-consumer scrap
Iron or steel products
- Precursor reducing agent
- Manganese content
- Chromium content
- Nickel content
- Content of other alloy elements
- Non-iron content
- Steel product scrap usage
- Steel pre-consumer scrap
Ammonia
- Ammonia concentration
Nitric acid
- Nitric acid concentration
Urea
- Urea purity
Mixed fertilizers
- Ammonium Nitrogen content
- Nitrate Nitrogen content
- Urea Nitrogen content
- Other Nitrogen content
Hydrogen
None
Electricity
None
3. Define the reporting period
The reporting period is the reference period for determining the embedded emissions of your CBAM produced goods. You should calculate the direct and indirect embedded emissions of your goods as the average of the reporting period chosen.
Default reporting period
The default reporting period is 12 months. This would enable you to collect representative data that reflects your installation’s annual operations. The default option is to use the European calendar year. However, you may also use your fiscal year if it leads to more accurate data or if it helps avoid unreasonable costs.
Alternative reporting period
You may choose an alternative reporting period of at least three months if your installation participates in an eligible Monitoring, Reporting, and verification (MRV) system and the reporting period coincides with the requirements of that MRV system. You can find more details about the reporting period in the guidance document made available by the EU Commission for third-country operators on its CBAM-dedicated page.
4. Identify all the parameters you need to monitor and determine the monitoring methodology
You need to determine the methodology you will use to monitor various parameters, including direct and indirect emissions, activity levels and data, and the quantity of precursor materials purchased, among others. It is important to also check the “best available” data sources for each parameter. For calculating your direct emissions, the EU monitoring methodology is based on two main approaches:
- The calculation-based approach, which includes:
- The standard method
- The Mass-balance method
- The measurement-based approach
5. Compile the monitoring methodology documentation (MMD)
You need to compile all the parameters you have to monitor, along with the methodology you will use, in a Monitoring Methodology Documentation (MMD). This ensures that your monitoring activities remain consistent over the years, reflecting any improvements or changes.
This document should be clear and transparent enough for independent parties, such as GHG verifiers, to understand how you are monitoring emissions at your installation. You can find more details about how to set your MMD in the guidance document made available by the EU Commission for third-country operators on its CBAM-dedicated page.
6. Attribute Emissions
Before considering the embedded emissions of any precursor materials and calculating your specific direct and indirect embedded emissions, it’s necessary to attribute the emissions of your installation to each production process. This step will result in the direct and indirect attributed emissions. When attributing emissions to different production processes, you need to take into account any relevant heat streams as well as any waste gases derived from certain production processes such as the blast furnace of a steel plant.
Remember that when different production routes co-exist for the same production process, you have the option to either define a single production process for both routes or establish separate production process system boundaries for each.
In this case, 100% of your installation's emissions should be attributed to the single production process.
The general rule is that one production process relates to one aggregated goods category.
However, if you produce CBAM goods that fall under different aggregated goods categories, you may choose to define a joint production process (this is known as the "bubble approach"). Be aware that specific conditions must be met for this to be possible.
In this case, you should attribute emissions to each corresponding production process, ensuring that the total attribution across all processes sums up to 100% of the installation's emissions.
This means that all inputs, outputs and corresponding emissions should be attributed to a production process, unless they relate to a non-CBAM good.
In this case, you should attribute your installation’s emissions to the corresponding CBAM production process(es).
It is your choice to include the non-CBAM production process(es) in your monitoring methodology. However, it is a recommended improvement to attribute the remaining emissions to them, as this would help confirm that all relevant emissions have been covered.
7. Calculate emissions and communicate the data
The final step involves calculating your specific direct and indirect embedded emissions. If applicable, begin by adding the emissions of any relevant precursors to determine the total direct and indirect embedded emissions. Then, divide these emissions by the activity level of the corresponding production process to get the specific direct and indirect embedded emissions, expressed in tCO2e per tonne of product. To calculate the specific total embedded emissions, simply sum up the direct and indirect values.
For the purpose of communicating the data to your clients, the EU Commission has made available a voluntary CBAM communication template that can greatly simplify your reporting efforts. It’s also been designed to perform most of the relevant calculations automatically.
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