Technical study on indirect emissions in the CBAM - Final Report
This study - commissioned by the European Commission - provides policy analysis to support the implementation and potential evolution of the Carbon Border Adjustment Mechanism (CBAM) with respect to indirect emissions embedded in imported goods from third countries. It addresses three questions:
- how to determine operational default emission factors for indirect emissions;
- under what conditions declarants should be allowed to claim actual indirect emissions, including requirements for direct technical links, power purchase agreements (PPAs), and verification;
- and whether and how indirect emissions coverage could be extended to additional CBAM sectors.
The analysis combines methodological assessment, analysis of the currently applicable rules under the CBAM, scenario testing, and structured stakeholder input. It evaluates trade-offs between ensuring environmental integrity (including risks of resource shuffling), carbon leakage prevention , administrative feasibility, and securing even-handed treatment between EU and non-EU producers. Particular attention is given to risks of resource shuffling, data limitations, verification complexity, as well as the need to avoid double carbon leakage protection with Indirect Cost Compensation.
The findings provide an evidence base for developing operational rules in the definitive period from 2026 and clarify the design conditions under which an expanded indirect emissions coverage would strengthen the CBAM’s effectiveness while maintaining legal robustness and practical feasibility.