How CBAM calculates the carbon in a tonne of goods, equation by equation

By Ahmed Medhat · Published5 October 2026

Every CBAM cost starts from one number: the specific embedded emissions of a good, in tonnes of CO2e per tonne (or per other functional unit) of that good. Cost articles, ours included, usually start from that number and turn it into euros. This one covers the step before: how an operator gets to it. The equations are in Implementing Regulation (EU) 2025/2547, and they run in five steps.

The numbers in the worked example below are made up. They are round figures chosen to show the arithmetic. They are not a default value, not a benchmark and not any real installation.

Step 1: the installation's emissions, source stream by source stream

The operator first works out what the installation emits. With the standard calculation method, emissions are worked out separately for each source stream. For a fuel burned, that is activity data times the emission factor times the oxidation factor: Em = AD × EF × OF, where the activity data is the fuel quantity times its net calorific value (Annex II, point B.3.1.1, Equations 5 and 6). Annex II also has a mass balance method (point B.3.2) and a measurement-based method (point B.6).

Step 2: attribute the emissions to the production process

An installation can make more than one good, so its emissions are split into production processes. For the direct emissions of a process, Equation 55 in Annex III, point A.3, does the accounting:

AttrEm(Dir) = DirEm* + EmH,imp − EmH,exp + WGcorr,imp − WGcorr,exp − Emel,prod

In words: the emissions directly attributable to the process, plus the emissions of measurable heat it imports, minus those of heat it exports, with corrections for waste gases imported and exported, minus the emissions of any electricity produced inside the process. If the result is negative, it is set to zero.

The indirect emissions of the process are the emissions of the electricity it consumes (Equation 56).

Step 3: the activity level

The activity level is "the total mass of the goods leaving the production process during the reporting period", in functional units and in tonnes (Annex II, point F).

Step 4: a simple good

For a good with no precursors counted, the specific embedded emissions are the attributed emissions divided by the activity level: SEE(Dir) = AttrEm(Dir) / AL, and the same for indirect (Annex III, point A.3, Equations 57 and 58).

Step 5: a complex good, with its precursors

Many CBAM goods are made from other CBAM goods, their precursors. For these complex goods, the embedded emissions of the precursors are added before dividing (Annex III, point B, Equations 59 and 60):

SEE(g) = (AttrEm(g) + Σ Mi × SEEi) / AL(g)

Mi is the mass of precursor i used, and SEEi its own specific embedded emissions. A few rules sit around that sum:

• Only precursors not covered by the same production process count.
• Mi is all the precursor used, including what is cut off, spilt or burned and never ends up in the good.
• A precursor from the Union, or from a country or territory in point 1 of Annex III to Regulation (EU) 2023/956, counts as zero.
• A precursor with its own precursors is worked out first, the same way, and so on down the chain.
• Where the data received for a precursor is incomplete or inconclusive, the default values are used for that quantity (Annex II, point E(3)).

The arithmetic, on made-up numbers

Illustrative only, not real data. Say a production process makes 5,000 tonnes of good G in the year.

• Its directly attributable emissions come to 2,000 t CO2e. It imports measurable heat worth 100 t CO2e and exports none. There are no waste gases and no electricity produced. So AttrEm(Dir) = 2,000 + 100 = 2,100 t CO2e (Equation 55).
• It uses 5,200 tonnes of precursor P, whose specific direct embedded emissions are 1.8 t CO2e per tonne. That adds 5,200 × 1.8 = 9,360 t CO2e (Equation 60).
• SEE(Dir) of G = (2,100 + 9,360) / 5,000 = 2.292 t CO2e per tonne (Equation 59).

Direct only, for some goods

For the goods listed in Annex II to Regulation (EU) 2023/956, only the direct emissions are taken into account (Article 7(1)). For the others, the direct and indirect figures are worked out side by side, with the same equations.

Where this stops

The result is the figure the operator's emissions report carries for each good (IR (EU) 2025/2547, Annex IV, point 1.1), and the operator may disclose it to a declarant (Article 10(7) of Regulation (EU) 2023/956). Turning it into a number of CBAM certificates is the declarant's job, and it happens later, after any carbon price paid (Article 9) and the free-allocation adjustment (Article 31) are taken into account (Article 6(2)(c)). The unit article covers what AL is measured in for each good, and the precursor article covers why a supplier's precursor figure often cannot be used as it stands.

In DeCarbonPro, an operator's embedded emissions are calculated with the equations of Implementing Regulation (EU) 2025/2547.