What are direct and indirect emissions?
Direct emissions cover the emissions generated during the production processes of CBAM goods, including from the production of heating and cooling, irrespective of the location of the production of the heating and cooling. This means that when the production of heating and cooling takes place outside the installations, the resulting emissions are counted as direct emissions.
Indirect emissions cover the production of electricity that is consumed during the production of CBAM goods.
The embedded direct and indirect emissions of relevant precursors are also taken into account when determining the specific embedded direct and indirect emissions of CBAM goods.
During the transitional phase, for monitoring purposes, importers are required to report both direct and indirect emissions for all goods falling under the scope of CBAM. During the definite phase starting on 1 January 2026, the CBAM scope is limited to direct emissions for iron/steel, aluminium and hydrogen, while importers of cement and fertilisers will have to declare both direct and indirect emissions.
Source: EC’s Questions and Answers on CBAM