circular economy,  compliance e AEO,  made in

Default values, CBAM, AEO and compliance

The European Commission published the guidelines on “Default values for the transitional period of the CBAM between 1 October 2023 and 31 December 2025.”  By which:

  1. Recalls the legal nature of the Carbon Border Adjustment Mechanism (CBAM) which “…is an environmental policy instrument designed to support the EU climate ambitions of achieving a net reduction of greenhouse gas (GHG) emissions of at least 55% by 2030 and of reaching climate neutrality by 2050 at the latest…”;
  2. Underlines that the default values are an average of the intensity of the emissions for each categories of commodities covered by the CBAM. Indeed, the guidance provides that “…Default values do play a specific role in CBAM implementation during the transitional period in particular if importers do not have all the necessary information:
  3. During the three first quarterly reports (Q4 of 2023 and Q1&2 of 2024), declarants may report embedded emission based on default values made available and published by the European Commission without quantitative limit ;
  4. From Q3 of 2024 and until the end of 2025, declarants can still report emissions based on estimations but only for complex goods and with a limit of 20% of the total embedded emissions. Using default values would qualify as ‘estimation’…”.
  5. Adds about the timing of the default values and the made in that “… independently of the country of origin of the CBAM goods and only until the end of the transitional period on 31 December 2025…”. Moreover, the guidance clarifies that “…Until the end of 2024, companies will have the choice of reporting in three ways: (a) full reporting according to the new methodology (EU method); (b) reporting based on an equivalent method (three options) and (c) reporting based on default reference values (only until July 2024, i.e for Q4 of 2023 and Q1&Q2 of 2024)…”.

The default values will impact on the following categories of goods:

  1. Default values for the transitional period for iron and steel;
  2. Default values for the transitional period for cement;
  3. Default values for the transitional period for fertilisers;
  4. Default values for the transitional period for aluminium;
  5. Default values for the transitional period for

The provision of the default values does not cover the electricity import.

It is useful to add that the general approach for determining embedded indirect emissions in CBAM goods is to use default values for the emission factor for electricity. Indirect emissions are then calculated by multiplying those default values with the amount of electricity consumed to produce the respective CBAM goods. The default values represent the average emission factors of the country of origin electricity grid, based on data from the International Energy Agency (IEA).

Moreover, the section n.5 of the guidance provides with an interesting CBAM glossary that you can find below:

Actual emissions= emissions calculated based on primary data from the production processes of goods and from the production of electricity consumed during those processes

Aggregated goods= category a group of CBAM goods with their CN codes, used for the purpose of defining system boundaries of production processes

CO2 emission factor= weighted average of the CO2 intensity of electricity produced from fossil fuels within a geographic area. With respect to the geographic area, the default values for the CO2 emission factors for electricity as CBAM good referred to in this document refer to countries.

Combined nomenclature (CN)= classification of goods, designed to meet the needs of: i) the Common customs tariff, setting import duties for products imported into the European Union (EU), as well as the Integrated tariff of the European Communities (Taric), incorporating all EU and trade measures applied to goods imported into and exported out of the EU; ii) the international trade statistics of the EU. The CN provides the means of collecting, exchanging and publishing data on EU international trade statistics. It is also used for the collection and publication of international trade statistics in intra-EU trade

Default value= value that is calculated or drawn from secondary data, which represents the embedded emissions in goods;

Direct emissions =emissions from the production processes of goods including emissions from the production of heating and cooling that is consumed during the production processes, irrespective of the location of the production of the heating and cooling

Embedded emissions= direct emissions released during the production of goods and indirect emissions from the production of electricity that is consumed during the production processes;

Emissions=release of greenhouse gases into the atmosphere from the production of goods;

Emission factor for electricity = default value, expressed in CO2e, representing the emission intensity of electricity consumed in production of goods Goods goods listed in Annex I to the CBAM Regulation (EU) 2023/956;

Indirect emissions emissions from the production of electricity, which is consumed during the production processes of goods, regardless of the location of the production of the consumed electricity

Installation= a stationary technical unit where a production process is carried out;

Operator= any person who operates or controls an installation in a third (i.e. non-EU) country

Reporting declarant = any of the following persons:

(a) the importer who lodges a customs declaration for release for free circulation of goods in its own name and on its own behalf;

(b) the person, holding an authorisation to lodge a customs declaration referred to in Article 182(1) of Regulation (EU) No 952/2013, who declares the importation of goods;

(c) the indirect customs representative, where the customs declaration is lodged by the indirect customs representative appointed in accordance with Article 18 of Regulation (EU) No 952/2013, when the importer is established outside the Union or where the indirect customs representative has agreed to the reporting obligations in accordance with Article 32 of Regulation (EU) 2023/956;

 Specific embedded emissions= embedded emissions of one tonne of goods, expressed as tonnes of CO2e emissions per tonne of goods;

Tonne of CO2e:  one metric tonne of carbon dioxide (‘CO2’), or an amount of any other greenhouse gas listed in Annex I to the CBAM Regulation with an equivalent global warming potential (‘CO2e‘)


  • Cement (25070080 – Kaolin and other kaolinic clays, calcined; 25231000 – Cement clinkers; 252321 00 – White Portland cement, whether or not artificially coloured; 25232900 – Other Portland cement; 25233000 – Aluminous cement; 25239000 – Other hydraulic cements); greenhouse GAS related: carbon dioxide;
  • Fertilisers (28080000 – Nitric acid; sulphonitric acids; 2814 – Ammonia, anhydrous or in aqueous solution; 28342100 – Nitrates of potassium; 3102 – Mineral or chemical fertilisers, nitrogenous; 3105 – Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium); greenhouse GAS related: carbon dioxide; nitrous oxide;
  • Iron and Steel (72 – Iron and steel [with exceptions]; 7301– Sheet piling of iron or steel; 7302 – Railway or tramway track construction material of iron or steel, the following; 730300 – Tubes, pipes and hollow profiles, of cast iron; 7304 – Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel; 7305 – Other tubes and pipes; 7306 – Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel; 7307 – Tube or pipe fittings; 7308 – Structures of iron and steel; 7309 – Reservoirs, tanks, vats and similar containers for any material of iron and steel; 7310 – Tanks, casks, drums, cans, boxes and similar containers of iron and steel; 7311 – Containers for compressed or liquefied gas, of iron or steel; 7318 – Screws and other items; 7326 – Other articles of iron or steel); greenhouse GAS related: carbon dioxide;
  • Aluminium; (7601 – Unwrought aluminium; 7603 – Aluminium powders and flakes; 7604 – Aluminium bars, rods and profiles; 7605 – Aluminium wire; 7606 – Aluminium plates, sheets and strip; 7607 – Aluminium foil; 7608 – Aluminium tubes and pipes; 76090000 – Aluminium tube or pipe fittings; 7610 – Aluminium structures; 76110000 – Aluminium reservoirs; 7612 – Aluminium casks; 76130000 – Aluminium containers for compressed or liquefied gas; 7614 – Stranded wire; 7616 – Other articles of aluminium); greenhouse GAS related: Carbon dioxide and perfluorocarbons
  • Chemicals (hydrogen): HS code: 2804 10 000; gas: carbon dioxide;


The  Guidance document on CBAM implementation for importers of goods into the EU shares the following workflow aiming to simply the operational aspects of the CBAM compliance:

  1. The importer (reporting declarant) receives CBAM goods from various installations, possibly from different countries outside the EU.
  2. For each import, the importer lodges the usual customs declaration. The customs authority of the relevant EU Member State checks and clears the import, as usual.
  3. The customs authority (or the IT system used) informs the European Commission (using the CBAM Transitional Registry) of this import. This information can then be used to check the completeness and accuracy of quarterly CBAM reports.
  4. The reporting declarant requests the relevant data on specific embedded emissions of the imported CBAM goods from the operators (in practice, this may involve intermediary traders, who would have to forward the request to the operator of the installation which produced the CBAM goods). The latter reply by sending the requested data, if possible using the template provided for this purpose by the Commission. The data may be voluntarily verified by a third-party verifier.
  5. The reporting declarant is then able to submit the quarterly CBAM report to the CBAM Transitional Registry. 6. An information exchange between the Commission and the competent authorities in the EU Member States takes place. The Commission informs (based on the customs data), which reporting declarants are expected to submit CBAM reports. Furthermore, the Commission can perform spot checks of actual reports and check their completeness with regards to the customs data. Where irregularities are identified, the Commission informs the competent authority of this.

The competent authority will then follow up, usually by getting in contact with the importer and Importer (reporting declarant) European Commission CBAM Transitional Registry. If the reporting declarant does not correct the mistakes, the competent authority can ultimately impose a (financial) penalty.

  1. to avoid similar problems in the future, the importer who received a penalty should inform the operator of the problem(s) identified by the Commission or the competent authority in order to address the issue(s) for future submissions.

Finally, it is important to notice that the mentioned workflow can be token into consideration for:

  1. implementing internal customs procedures;
  2. monitoring of the procedures;
  3. risks assessment of the internal processes.

In other words, the CBAM implies an array of obligations manageable by the AEO (trust & check) operators

Finally, in order to complete our check of the relationships between the reporting declarant for CBAM and AEO we would recall that M.L. Schippers  & W. de Wit in “Proposal for a Carbon Border Adjustment Mechanism underlined that an AEO status helps and improves the CBAM fullfilment.

Indeed, they wrote: “…As well as the establishment requirement, parties wanting to qualify as authorized declarants have to meet various other conditions, as shown by the information to be included with requests for registration (Article 5(3)). These include having an Economic Operators Registration and Identification (EORI) number and complying with conditions reminiscent of some of the conditions applying to parties wanting to be classified as an Authorized Economic Operator (AEO). These include evidence of their proper compliance with tax and customs requirements and of being operationally and financially able to meet their obligations under the CBAM proposal…” and again “…In order to reduce the administrative burden for competent authorities and authorized declarants alike we would be in favour of allowing certain conditions to be regarded as being met if the customs authorities have already designated the applicant as an AEO. Under Article 16(1), successful applications for the status of authorized declarant result in declarants being assigned a unique CBAM account number. Authorized declarants are granted access to the national database in which their details are registered…”.