Technical study on indirect emissions in the CBAM
The European Carbon Border Adjustment Mechanism (CBAM) aims to prevent carbon leakage by imposing a carbon price on carbon-intensive imported goods that is comparable to that in the EU, in order to create a level playing field and provide incentives for lower-emission production worldwide. This is based on a calculation of the CO₂ intensity of the imported goods in question.
The study “Technical Study on Indirect Emissions in the CBAM – Final Report Task 2”, commissioned by the European Commission, analyses which evidence should be required when CBAM declarants seek to report actual indirect emissions instead of default values. It focuses on indirect emissions from electricity generation consumed during the production of CBAM goods and examines under which conditions these emissions can be substantiated through direct technical links or power purchase agreements (PPAs).
The analysis shows that a “direct technical link” in the CBAM context may cover both direct lines and private grids, provided that electricity flows can be clearly traced. Key requirements include physical connectivity, technical documentation, smart metering, traceable measurement data and clear contractual arrangements. For PPAs, the study assesses different contractual forms and requirements, including direct and indirect PPAs, physical and virtual PPAs, energy attribute certificates, temporal and geographical correlation, additionality and technology-related minimum requirements.
A central focus of the study is the environmental integrity of the CBAM. The report highlights resource shuffling as a particularly relevant risk: existing low-carbon electricity volumes could be allocated to CBAM production without actually decarbonising the electricity mix in the third country. The study therefore concludes that robust evidence, clear criteria for electricity supplied under PPAs and under direct technical links, and specific verification competences are needed.