The European Commission has published a technical study on indirect emissions under CBAM, dated 8 June 2026, through DG TAXUD. The study is important because it moves CBAM from a narrow direct-emissions compliance framework toward a more electricity-sensitive industrial policy tool. It focuses on how emissions from electricity consumed in producing CBAM goods should be calculated, when importers may claim actual indirect emissions, and whether indirect emissions coverage should be extended to additional CBAM sectors. (Taxation and Customs Union)
The Commission frames the study around three policy questions: how to determine operational default emission factors for indirect emissions, under what conditions declarants should be allowed to claim actual indirect emissions, including rules for direct technical links, PPAs and verification, and whether indirect emissions should be extended to additional CBAM sectors. This means the study is not only technical; it is a design paper for the definitive CBAM period, especially for exporters that use electricity-intensive processes. (Taxation and Customs Union)
The broader final report says the analysis combines methodological assessment, review of existing CBAM rules, scenario testing and stakeholder input. It weighs environmental integrity, carbon-leakage prevention, administrative feasibility, even-handed treatment between EU and non-EU producers, and risks such as resource shuffling, weak data, verification complexity and overlap with EU indirect cost compensation. (Publications Office of the EU)
The main policy signal
The main signal is that electricity is becoming a core CBAM compliance variable. Until now, many exporters have treated CBAM mainly as a question of plant-level process emissions: fuel combustion, calcination, process chemistry, reduction agents, furnace emissions and other direct sources. The Commission’s new study makes clear that the electricity side is moving closer to formal compliance architecture.
This matters most for aluminium, steel, fertilisers, cement, hydrogen and electricity-intensive processing chains, especially in countries outside the EU where grid electricity can have a higher carbon intensity than the EU average. For the Western Balkans, Türkiye, Ukraine, North Africa, the Gulf and parts of Asia, the study points toward a future where exporters will need much stronger evidence of electricity origin, metering, consumption boundaries and contractual power supply.
Task 1: Default emission factors
The first policy area is the design of default emission factors for indirect emissions. In practical terms, this means deciding which emissions factor should be used when an exporter or declarant cannot prove actual electricity-related emissions with sufficient quality.
The commercial importance is substantial. A default factor can become the baseline penalty for weak data. If an exporter cannot document actual electricity consumption and supply, the CBAM declarant may have to rely on a conservative default value. For countries with carbon-intensive grids, this could raise the embedded-emissions figure and increase the CBAM certificate exposure once the definitive system is fully operational.
For exporters, the operational lesson is clear: weak electricity data may become expensive. Plants will need to show not only total electricity consumption, but consumption by installation, production line, product route, batch or process boundary. For aluminium, steel rolling, ferroalloys, cement grinding, ammonia, hydrogen or precursor production, this pushes CBAM readiness into electrical metering architecture, not only environmental reporting.
Task 2: Actual indirect emissions, PPAs and verification
The second policy area is the most important for exporters and industrial buyers. The study examines when declarants should be allowed to claim actual indirect emissions, including requirements for direct technical links, power purchase agreements and verification. The Commission’s publication explicitly identifies PPAs and technical links as central design conditions. (Taxation and Customs Union)
This is a major signal for green electricity procurement. It means that an exporter’s claim that it uses renewable or low-carbon electricity will likely need to be supported by more than a simple certificate or supplier statement. The study points toward a framework where the credibility of actual indirect-emissions claims depends on physical, contractual and verification evidence.
A direct technical link would likely be the strongest form of proof: for example, a dedicated renewable generation asset connected to the production installation or a clearly traceable behind-the-meter arrangement. PPAs may also be relevant, but the key issue will be whether the PPA proves genuine low-carbon electricity consumption or merely reallocates clean electricity on paper while the physical grid remains carbon-intensive.
This is where resource shuffling becomes central. The final report metadata highlights resource-shuffling risk as one of the study’s key concerns. Resource shuffling occurs when clean electricity is contractually assigned to CBAM-export production while dirtier electricity is left for other users, without reducing total system emissions. The Commission is clearly concerned that actual-emissions claims must not become a paper exercise that undermines environmental integrity. (Publications Office of the EU)
For Serbian and SEE exporters, this creates a practical due-diligence agenda. A green PPA will not be enough unless it is supported by a credible data package: power meter readings, hourly or sub-hourly consumption records where relevant, generation proof, grid connection documentation, GO or equivalent certificate controls, matching logic, settlement records, and independent verification. This turns electricity procurement into a CBAM engineering task.
Task 3: Extension to additional sectors
The third policy area is whether and how indirect-emissions coverage could be extended to more CBAM sectors. Under the definitive CBAM framework, indirect emissions are currently covered for cement and fertilisers, while during the transitional period indirect emissions are reported for all CBAM goods except electricity, according to the Publications Office summary for Task 2. (Publications Office of the EU)
The Task 3 summary places this question inside the broader EU carbon leakage framework, including the EU ETS Directive, free allocation, indirect cost compensation and the CBAM Regulation. It also notes that state-aid rules for indirect cost compensation define how Member States may compensate electricity-intensive industries for indirect carbon costs passed through power prices. (Publications Office of the EU)
This is politically sensitive. If the EU extends CBAM indirect-emissions coverage too widely, non-EU exporters could face a higher compliance and cost burden. But if the EU does not extend it, EU producers that pay indirect carbon costs through electricity prices may argue that imports are not facing an equivalent carbon constraint. The study is therefore trying to balance environmental integrity, WTO/legal robustness, administrative feasibility and competitive neutrality.
For energy-intensive sectors, this is the start of a larger debate. Aluminium is the obvious candidate because electricity is central to primary aluminium emissions and cost structure. Steel can also be affected, especially electric arc furnace routes, rolling, downstream processing and hydrogen-based pathways. Fertilisers already have strong relevance because electricity can influence ammonia, hydrogen and related production routes. Cement is affected through grinding and electricity consumption, even though process emissions remain dominant.
Implications for exporters
The exporter implication is direct: CBAM readiness must now include an electricity evidence system. Exporters should not wait for final legal wording before building the data architecture. The minimum credible package should include plant electricity balance, production-process boundary maps, product-level electricity allocation rules, metering hierarchy, electricity supplier contracts, PPA documentation, guarantees of origin or equivalent instruments, grid-emission-factor assumptions, and an audit trail linking electricity use to exported goods.
For a Serbian steel, aluminium, cement, fertiliser or precursor producer, the key question becomes: can the plant prove what electricity was consumed, when it was consumed, where it came from, how it was allocated to the exported product, and whether the claim can survive importer and verifier review?
This also changes the role of the EU importer. The importer or authorised CBAM declarant cannot simply accept supplier declarations at face value. The importer will need a mirror-verification protocol: supplier data request, plausibility check, electricity contract review, metering evidence, production volume reconciliation, embedded-emissions calculation review, and escalation rules if data quality is weak.
Implications for PPAs and renewable developers
The study creates a new commercial opportunity for renewable developers outside the EU. A PPA with an exporter may become more valuable if it helps reduce CBAM indirect-emissions exposure. This can improve offtaker credit quality and strengthen the bankability of renewable projects serving industrial customers.
However, PPA value will depend on compliance credibility. A generic green electricity contract will be weaker than a structured CBAM-ready PPA with clear metering, generation matching, certificate retirement, grid connection evidence, delivery shape, balancing responsibility and verification access. Renewable developers, banks and exporters should therefore treat CBAM as a new bankability layer in industrial PPAs.
For SEE renewable markets, this is particularly important. Serbia, Montenegro, Bosnia and Herzegovina, North Macedonia and Albania have industrial exporters that could benefit from documented low-carbon power. The strongest commercial model is not just “green electricity”; it is CBAM-verifiable electricity.
Implications for verification and Owner’s Engineer-type support
The study reinforces the need for third-party technical support before formal verification. Exporters will need technical consultants who understand production processes, electricity systems, metering, SCADA, PPAs, guarantees of origin, emission-factor logic and audit trails. This is closer to Owner’s Engineer / technical due diligence than classic accounting support.
A practical CBAM indirect-emissions readiness review should cover the plant’s electrical single-line diagram, grid and self-generation interfaces, metering points, transformer and substation records, SCADA logs, production-line consumption, production allocation rules, PPA settlement data, certificate registry evidence, and reconciliation between production volumes and electricity consumption. Without that technical basis, a legal or accounting declaration will remain exposed.
View on three core takeaways
First, the Commission is preparing the ground for operational indirect-emissions rules in CBAM. The study is not a final regulation by itself, but it is a policy evidence base for the definitive period and future design decisions. (Publications Office of the EU)
Second, actual indirect-emissions claims will likely require robust evidence. The study explicitly focuses on direct technical links, PPAs and verification, which means that electricity procurement, metering and contractual proof will become central to CBAM compliance. (Taxation and Customs Union)
Third, extension of indirect-emissions coverage to more sectors could become one of the next major CBAM policy moves. This would raise the strategic importance of green electricity for exporters and could reshape industrial PPAs, renewable project bankability and supply-chain due diligence for EU-bound products. (Publications Office of the EU)
Practical action list for exporters
Exporters should immediately map electricity consumption by product and process, identify all metering gaps, collect electricity supplier and PPA documentation, establish a guarantee-of-origin or equivalent certificate-control process, build a product-level electricity allocation methodology, prepare a default-versus-actual-emissions comparison, and create a verification file that an EU importer can review before CBAM costs become financially material.
The strategic conclusion is simple: CBAM is moving from emissions reporting into electricity documentation. For exporters in carbon-intensive grids, the ability to prove low-carbon electricity use may become a competitive advantage, while weak data may translate directly into higher CBAM exposure.
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