EU CBAM Default Emission Factor Application Rules and Third-Party Verification Requirements for Primary Data
ENFORCEMENT TIMELINE
Transitional phase began October 1, 2023 (third-party verification of measured data mandatory from 2026)
Overview
This card focuses on the application conditions and limits for the 'default values' published by the European Commission under the EU Carbon Border Adjustment Mechanism (CBAM: Regulation (EU) 2023/956), and on the accuracy standards and third-party verification requirements for 'primary data' obtained from overseas suppliers.
Under CBAM, where an importer cannot obtain reliable measured emissions data from an overseas manufacturing facility, the use of sector- and country-specific default values published by the European Commission is permitted as a fallback under certain conditions. Default values for full application (2026 onward) are set in Implementing Regulation (EU) 2025/2621 (corrected by Implementing Regulation (EU) 2026/1740 of July 20, 2026): the average emission intensity of each exporting country is increased by a mark-up (10% in 2026, 20% in 2027 and 30% from 2028 for cement, iron and steel, aluminium and hydrogen; 1% for fertilisers). Whether actual primary data, measured and verified in line with the EU's Monitoring, Reporting and Verification (MRV) rules, is available therefore largely determines the cost burden.
Enforcement Timeline
Until July 31, 2024: In transitional-period reports, where the information needed for actual emissions was missing, other methods could be used, including default values published by the Commission (Implementing Regulation (EU) 2023/1773, Article 4(3)).
Throughout the transitional period (October 2023 to December 2025): Up to 20% of the total embedded emissions of complex goods could be based on estimates provided by installation operators (Article 5 of the same Regulation).
January 1, 2026: Full application begins. Where actual emissions are used, the declared embedded emissions must be verified by an accredited verifier (CBAM Regulation, Article 8(1)). The default values in Implementing Regulation (EU) 2025/2621 also apply.
From 2026: The European Commission updates country- and region-specific grid electricity emission factors and default values annually.
Business Impact
Companies sourcing primary data from overseas raw material and component suppliers must systematically organize plant-level energy consumption, fuel type data, and electricity meter readings in line with the CBAM calculation rules (Annex IV to the CBAM Regulation and Implementing Regulation (EU) 2025/2547). For calculating indirect emissions from electricity, strict rules generally apply, requiring use of the average emission factor of the local grid or, alternatively, renewable electricity meeting specific requirements such as a direct PPA.
The measured data collected must also undergo independent audit by a verifier accredited under Delegated Regulation (EU) 2025/2551, resulting in the issuance of a verification report. Failing to surrender the required number of certificates by the deadline incurs penalties (CBAM Regulation, Article 26), and serious or repeated infringements of the surrender obligations can lead to revocation of authorised CBAM declarant status (Article 17(8)), making it essential to support overseas suppliers in building MRV capacity and ensuring data reliability.