The European Commission has released a technical study on indirect emissions under the Carbon Border Adjustment Mechanism (CBAM), dated June 8, 2026. This report marks a significant shift in CBAM’s approach, evolving from a focus solely on direct emissions compliance to incorporating indirect emissions related to electricity consumption in production processes. The study outlines how importers can calculate these indirect emissions and the conditions under which they may claim actual emissions, potentially expanding coverage to additional sectors.
Central to the study are three key policy questions: the determination of default emission factors for indirect emissions, the conditions under which declarants can claim actual indirect emissions, and the potential extension of indirect emissions coverage to more CBAM sectors. This comprehensive analysis combines methodological assessments, existing CBAM rule reviews, scenario testing, and stakeholder feedback, emphasizing the importance of environmental integrity and administrative feasibility.
A notable takeaway from the report is that electricity consumption is becoming a critical compliance variable for CBAM. Previously, exporters primarily focused on direct emissions from production processes. However, this new perspective indicates that exporters in sectors such as aluminium, steel, fertilizers, and cement will need to provide detailed evidence regarding their electricity sources and usage.
The first area of focus is the establishment of default emission factors for indirect emissions. This aspect is crucial as it determines the baseline penalties for exporters who cannot substantiate their actual electricity-related emissions. For countries with higher carbon-intensive grids, reliance on default factors could lead to increased exposure under CBAM regulations.
The second area addresses when exporters can claim actual indirect emissions, emphasizing the importance of direct technical links and power purchase agreements (PPAs). The study suggests that claims regarding renewable energy usage must be backed by substantial documentation beyond simple certificates. This includes evidence of physical connections to renewable energy sources and verification processes to prevent resource shuffling—where cleaner electricity is allocated to exports while dirtier sources are used elsewhere.
Lastly, the third area considers whether indirect-emissions coverage should be broadened to include more sectors within CBAM. Currently, only cement and fertilizers are covered under definitive CBAM rules for indirect emissions. The implications of extending this coverage could significantly impact non-EU exporters who might face increased compliance costs while also raising concerns among EU producers about competitive neutrality.
For exporters in Serbia and other Southeast European countries, adapting to these changes will require robust systems for documenting electricity usage. This includes detailed records of consumption patterns linked to specific products, comprehensive electricity supplier contracts, and verification protocols that ensure compliance with CBAM requirements.
The study also presents opportunities for renewable energy developers outside the EU. Establishing PPAs that align with CBAM requirements could enhance their value by helping exporters mitigate indirect-emissions liabilities. However, these agreements must include stringent documentation and verification processes to ensure compliance credibility.
In conclusion, as CBAM evolves towards integrating indirect emissions into its framework, exporters must proactively develop systems for tracking and verifying their electricity consumption. The ability to demonstrate low-carbon electricity use will likely become a competitive advantage in navigating future regulatory landscapes while ensuring compliance with EU standards.
