Six CBAM detail questions
Are emissions from mobile devices calculated?
No, the CBAM regulations stipulate that only fixed units need to be included in the production boundary to the system boundary, and the emissions from vehicles (forklifts, trucks, bulldozers, etc.) in the production process are not included in the system boundary.
The fixed unit here generally refers to industrial equipment such as kilns, furnaces, boilers, reactors, distillation towers, dryers, flue gas treatment, etc.
If the 8-digit CN code of CBAM products is not within the range, does the 4-digit CN code need to be filled in?
The CN (Common Nomenclature) code is the version of the European Union's HS (Harmonized System) code for international trade. The CN code usually consists of 8 digits (the first 6 digits are the same as the HS code). In Annex I of the CBAM regulation, if it contains a small number of digits, it means that all CN codes that begin with those digits are included.
Do production processes such as plant start-up, shutdown, and overhaul need to calculate emissions?
Emissions from operations that occur in the normal course of production during the reporting period are included in the attributable emissions, including start-ups, shutdowns, and emergencies.
The standard of zero emission of biomass
When biomass is used as fuel for combustion, the standards required by CBAM should be met, and the emission can be recorded as 0. If the biomass used for combustion does not meet these criteria, its carbon content should be considered fossil carbon.
1. Biomass shall comply with the sustainability and greenhouse gas reduction criteria set out in Articles 2 to 7 and 29 (10) of the European Parliament and of the Council Directive (EU) 2018/2001 on promoting the use of renewable energy.
2. Biomass in wastes and residues, with the exception of agricultural, aquaculture, fisheries and forestry residues, shall meet the criteria set out in Article 29(10). This also applies to waste and residues that are first processed into products and then further processed into fuels.
3. Electricity, heating and cooling generated from municipal solid waste are not subject to the criteria set out in paragraph 10 of article 29.
4. The criteria set out in Articles 2 to 7 and Article 29 (10) apply irrespective of the geographical location of the biomass source.
5. Compliance with the requirements set out in Article 29, paragraphs 2 to 7 and 10 of Directive (EU) 2018/2001, shall be assessed in accordance with Articles 30 and 31(1) of Directive (EU) 2018/2001.
Regarding the above renewable energy directives, I have put the original link below, and you can download it yourself if you need it.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.328.01.0082.01.ENG#d1e1731-82-1
If our own upstream suppliers do not provide precursor material data, how can the embedded emissions of the product be calculated?
Default emission factor values established by the European Commission for operators and importers of complex goods.
These default values are intended to allow them to calculate embedded emissions from upstream commodities that are used as input and consumed in the production of other CBAM commodities without actual emissions intensity data. These default values include both direct and indirect emissions and are expressed in tonnes of CO2e emissions per tonne of commodity.
However, these default values can only be used to calculate embedded emissions for complex commodities if upstream emissions account for less than 20% of total embedded emissions. For example, if a fastener manufacturer exports its products to the European Union, the embedded emission data of the stainless steel purchased by the precursor material must be checked with its own supplier, because the emission of the precursor material stainless steel is far more than 20%. Therefore, for such companies, they should not only consider how to deal with CBAM, but also how to deal with their customer relationships in the material supply chain in order to obtain real data.
With the default values, it is important to note that these values are set at high emission intensity levels, so in most cases it is more advantageous to use the actual values of the precursor material.
At present, the official website of the European Union has not published a database of default values for precursor materials, and the publication time is unknown. For suppliers, when preparing data in the near future, they can refer to a professional research report on the EU website. Annex II publishes the greenhouse gas emission intensity of the EU's major trading partners, such as steel, fertilizers, cement, and aluminium industrial products. The link is as follows:
https://publications.jrc.ec.europa.eu/repository/search?query=CBAM&sort=relevance
Can green electricity and green certificates be used to offset indirect emissions?
Green certificates are not allowed, and domestic green electricity trading still needs to wait for follow-up policies.
Regarding the use of electricity, it is simply understood that there are three aspects:
From the grid: The default approach is to use the default factor provided by the Commission in the CBAM Transitional Registration, which is based on data from the International Energy Agency (IEA) and is the average emission factor of the grid in the country of origin. However, if you, as an operator, deem it more appropriate to use any other emission factor from the country of origin grid, you can use it, provided that the factor is based on publicly available data and represents an average emission factor or a CO2 emission factor.
Own production: The emission factors of the fuel mix for electricity production and cogeneration are calculated according to specific rules in accordance with the CBAM Implementing Regulations, and this process requires that the monitoring methods also comply with EU requirements.
If you receive electricity from a specific installation, you can use the resulting emission factors to calculate emissions from that electricity under a "power purchase agreement", as long as the plant monitors its emissions in accordance with the rules set by the European Union and communicates the information to you appropriately. (The Power Purchase Agreement is still different from the domestic green power transaction, and the Power Purchase Agreement can refer to the power purchase agreement signed with various types of power sources in a broad sense, but in a narrow sense, it generally refers to the power purchase agreement signed by the user and new energy enterprises such as wind power and photovoltaic for a period of 10-20 years, and is accompanied by the transfer of green power certificate (REC). From the perspective of contract characteristics, PPA can be divided into two categories: physical PPA and visual PPA (hereinafter referred to as VPPA). Physical PPA, i.e., the PPA needs to be actually executed, requires the generator and the purchaser to be within the same grid. Virtual PPA is just a simple financial contract, and its essence is a contract for difference, which is only used to settle between the power generator and the consumer, and does not transmit electricity. In China, green electricity trading contracts are generally signed on an annual basis, and most users sign power purchase contracts with power generation companies through electricity sales companies. Due to the difference between domestic green power trading and foreign PPA, it is still necessary to wait for the introduction of detailed policies on whether domestic green power can use lower or "0" emission factors on Scope 2, but it is clear that under the current policy, green certificates cannot be deducted, not only domestic green certificates but also foreign green certificates, and the CBAM regulations clearly state that the use of market mechanisms (such as "origin assurance" or "green certificate", etc.) to determine specific emission factors such as renewable energy is not allowed. ）
