The European Commission clarified that fuel combustion and electricity use in the air-separation unit producing oxygen are excluded from the CBAM embedded-emissions calculation for hydrogen manufactured through partial oxidation or autothermal reforming. The clarification applies even though oxygen is used as an input in those production routes. It states that oxygen is not classified as a CBAM precursor for the purposes of the embedded-emissions calculation.
Under the Commission’s approach, the exclusion is based on legal methodology rather than the technical configuration of the production process. As a result, emissions linked to the energy required to produce oxygen are not included in the hydrogen’s reported CBAM value. The Commission’s clarification therefore narrows which energy-related emissions fall within the statutory CBAM accounting boundary.
Implications for comparing hydrogen production routes
The Commission’s clarification affects how different hydrogen pathways are compared under CBAM rules. Autothermal reforming (ATR) is described as a low-carbon hydrogen pathway under development, particularly when combined with high rates of carbon capture and storage (CCS). The treatment of air-separation energy changes which inputs influence the embedded-emissions figure reported under CBAM.
Excluding electricity used in the air-separation unit can improve ATR hydrogen’s reported embedded-emissions position relative to accounting approaches that cover a broader share of the production life cycle. The distinction is described as commercially relevant as Europe continues to support large-scale hydrogen projects. It also links emissions accounting outcomes to how projects are assessed against regulatory requirements.
H2M Eemshaven project and European Innovation Fund support
In the Netherlands, the H2M Eemshaven project was designed around a 1,000 MW low-carbon hydrogen plant. Planned production was approximately 210,000 tonnes annually. The project was associated with around EUR 162.15 million in European Innovation Fund support.
The project’s status later changed in the Commission’s programme records. The change is presented as highlighting differences between emissions accounting and project viability. Even when an applicable methodology yields a more favourable carbon figure, project economics are stated to depend on gas and electricity prices, CO₂ transport and storage, infrastructure availability, and long-term offtake arrangements.
Distinguishing carbon metrics for reporting and financing
The Commission’s clarification identifies which energy inputs contribute to the statutory CBAM value for hydrogen importers and financiers. It also indicates that a project’s full life-cycle emissions may be higher than its CBAM embedded-emissions figure when upstream or ancillary emissions fall outside the legal accounting boundary. This requires separating different measures used in carbon reporting.
The measures highlighted are physical life-cycle carbon emissions, EU Taxonomy or financing metrics, and CBAM embedded emissions. The Commission notes that these measures overlap but are not interchangeable. For hydrogen developers, accounting rules are described as affecting data collection and reporting design as part of commercial considerations.
Emissions systems need to capture information required by specific regulatory or financing frameworks rather than relying on a single carbon figure for all purposes. This aligns with the Commission’s clarification on which inputs are counted within CBAM embedded-emissions reporting for relevant hydrogen production routes.