Introduction
From 2026, the definitive period of the CBAM will apply. That means from 1 January 2026 onwards, importers will have to bear a “CBAM obligation” in the form of certificates, which they purchase at the average price of EU ETS allowances, for every CBAM good imported into the EU. Monitoring should be performed throughout the reporting period. Therefore, you must be prepared to provide your CBAM data and develop a monitoring methodology at your installation as soon as possible, as described in this guidance article.
You will want to create a methodology that is as simple as possible using the best and most reliable data sources as defined in section 6.4.4. of the Installation Monitoring Methodology. The methodology should contain written procedures with clear instructions including the locations of data and the various set roles/responsibilities.
Figure 1 shows the how the reporting boundary of CBAM compares to the typical Product Carbon Footprint (PCF). All parameters and procedures within CBAM's reporting boundary are to be monitored.
Figure 1. CBAM reporting and monitoring boundary
Guidance
What is a monitoring methodology?
What is a monitoring methodology?
A monitoring methodology provides all necessary information in regards to your CBAM data collection. A monitoring methodology document (MMD) ensures that all the monitoring activities are carried out consistently from one year to the next. In this regard, the MMD serves as a “rule book” for all your installation staff, as well as for training of new staff involved in the monitoring.
You will need to record methods involving data collection, maintenance and calibration of meters, descriptions of various calculations and formulae used, documentation of standard values used (sources), and any quality assurance methods (e.g. four eyes principle).
Written procedures should accompany the methodology and include the following:
Managing responsibilities and competency of personnel – description of roles and assignation of responsibilities to key members of staff
Data flow and control procedures
Quality assurance measures
Estimation method(s) for substituting data where data gaps are identified
Regular review of the monitoring methodology for its appropriateness
Procedure for regular review and update of the list of products and precursors produced and/or imported by an installation
How do I create a monitoring methodology
How do I create a monitoring methodology
Step 1. Define your installation's boundary
Step 1. Define your installation's boundary
This includes production processes and production routes that attribute to emissions of specific goods produced. A production route is a specific technology used in a production process to produce goods as defined in the Implementing Regulation and in Table 1.
Begin by listing names and quantities of all goods, stationary physical units (used in the production processes), inputs (raw materials, fuel, heat, electricity), outputs (produced goods, by-products, waste, heat, electricity, waste gases, and emissions), and emissions for your installation. This data may be collected via metering data, invoices, production protocols, or stock determination.
Use Table 1 of Section 2 of Annex 2 in the Implementing Regulation (or Table 1 in this article) to identify which goods produced at your installation are covered by CBAM and which aggregated goods category the goods belong in. Each aggregated good will required one production process to be defined.
Next, identify relevant production processes and routes producing your CBAM goods. List the relevant process units, inputs, outputs, and emissions. It may be helpful to draw a schematic of your installation. The emissions of such units must be monitored separately, and attributed to the production processes according to the amount of heat consumed in the different production processes.
The system boundaries may differ depending on the installation:
If your installation makes a single category of good, the installation boundary and production process system boundary for monitoring and reporting embedded emissions are the same.
If your installation makes several different unrelated categories of good, separate production process system boundaries must be defined within the single installation.
If your installation makes the same category of good by different production routes you, as an operator, may define either a single production process system boundary, or separate production process system boundaries of the different production routes. If you assign separate processes, the embedded emissions of the goods are calculated separately for each production route.
If your installation makes a category of complex good and its precursor and where this precursor is wholly used to make the complex good a joint production process system boundary may be defined within the installation.
If your installation also produces non-CBAM goods alongside CBAM goods, only production process system boundaries needs to be defined for the processes relating to CBAM goods within the installation. However, a recommended improvement from the basic requirements would be to also define an additional production process system boundary for the non-CBAM good, in order to confirm all relevant emissions have been covered.
Aluminium installations producing two or more goods from unwrought aluminium or aluminium product groups may monitor and report embedded emissions defining one joint production process, provided that none of the produced precursor materials are sold separately (i.e. the ‘bubble approach’ may be used).
The Implementing Regulation (section 3 Annex II) defines the system boundaries for direct emissions from different processes as listed below:
Unwrought aluminium – Primary (electrolytic) smelting production route
CO2 emissions from the consumption of electrodes or electrode pastes
CO2 emissions from any fuels used (e.g. for drying and pre-heating of raw materials, heating of electrolysis cells, heating required for casting)
CO2 emissions from any flue gas treatment, from soda ash or limestone if relevant
Perfluorocarbon emissions caused by anode effects monitored in accordance with Section B.7 of Annex III
In addition, the following production steps may be within the system boundaries:
Raw material preparation – including storage of various additive constituents
Electrolytic cell system for aluminium production process – all steps
Casting plant – all steps including holding furnaces, conveying systems, further metal processing (metal treatment, alloying and homogenisation) and casting.
Emissions control – for treating releases to air, water or ground
The process materials consumed by the primary aluminium production route – alumina, pre-baked carbon anodes, ‘green’ anode paste briquettes, cryolite and other additives – are treated as raw materials and so have zero embedded emissions
Special rules exist for the monitoring of PFC emissions.
2. Unwrought aluminium – Secondary melting (recycling) production route
CO2 emissions from any fuels used for drying and pre-heating of raw materials, used in melting furnaces, in pre-treatment of scrap such as de-coating and de-oiling, and combustion of the related residues, and fuels required for casting of ingots, billets or slabs
CO2 emissions from any fuels used in associated activities such as treatment of skimmings and slag recovery
CO2 emissions from any flue gas treatment, from soda ash or limestone if relevant
In addition, the following production steps may be within the system boundaries:
Raw material preparation – including sorting, pre-treatment (de-coating, de-oiling), drying and pre-heating of scrap
Furnace system for aluminium production process – all steps, including furnace charging, melting and holding furnaces
Casting plant – all steps including holding furnaces, conveying systems, further metal processing (metal treatment, alloying and homogenisation) and casting
Emissions control – for treating releases to air, water or ground
There are no PFC emissions from the secondary aluminium process.
3. Aluminium products production process
All CO2 emissions from fuel consumption in processes forming aluminium products, and flue gas cleaning
In addition, the following production steps may be within the system boundaries:
Raw material preparation – including pre-heating, re-melting and alloying
Forming processes – all forming process steps for basic aluminium products, including (but not limited to): extrusion, casting, hot and cold rolling, forging, drawing
Finishing activities – including sizing, annealing, surface preparation and treatment and further fabrication
Emissions control – for treating releases to air, water or ground
There are no PFC emissions resulting from aluminium products forming processes.
Step 2. Define your reporting period
Step 2. Define your reporting period
The reporting period is during which your parameters will be monitored. In most cases, the reporting period will be equivalent to one (European) calendar year, however, the minimum period is 3 months.
Step 3. Identify the parameters that need to be monitored
Step 3. Identify the parameters that need to be monitored
Parameters include data relating to direct and indirect emissions as well as precursors.
Direct emissions may include emissions from:
Carbon dioxide emissions resulting from the consumption of pre-baked carbon anodes or green anode paste during electrolysis – emissions result from the reaction of the carbon electrode with oxygen from the alumina or from other sources of oxygen such as from air. There are also emissions associated with the self-baking (coking) of green anode paste in situ in the Søderberg process.
Carbon dioxide emissions resulting from furnaces (e.g. holding, preheating, re-melting and annealing), where heated by the combustion of fuels used for the furnaces, from stationary plant only (excludes emissions from any mobile units such as vehicles).
Carbon dioxide emissions resulting from the production of measurable heating (e.g. steam) and cooling, that is consumed within the system boundaries of the production process, regardless of the location of the production of the heating and cooling (i.e. from on-site generation or from imports from off-site).
PFC emissions for CF4 and C2F6 only, formed during brief upset conditions known as the ‘Anode Effect’, when alumina levels drop too low and the electrolytic bath itself undergoes electrolysis.
Carbon dioxide emissions resulting from emissions control (e.g. from carbonate raw materials such as soda ash used for acidic flue gas cleaning).
Direct emissions may be monitored via 2 approaches. Both methods should reference specific sources of information and the responsible party at the installation.
Calculation-based approach
For this approach, you will need to determine the quantities of fuels and relevant materials consumed and the corresponding emission factors. There are 2 different methods available in accordance with the regulation:
Slope method (Method A)
The ‘anode effect minutes per cell-day’ (AEM) are recorded.
The AEM expresses the frequency of anode effects (number of anode effects / cell-day) multiplied by the average duration of anode effects (anode effect minutes / occurrence).
‘Overvoltage method’ (Method B)
The ‘anode effect overvoltage’ (AEO) per cell [mV] is recorded.
The AEO is determined as the integral of (time × voltage above the target voltage) divided by the time (duration) of data collection.
Measurement-based approach
For this approach, you will need to measure the concentration of greenhouse gases and flow of flue gases for each emission source.
Direct emissions related to heat flows are also to be monitored. These emissions may be monitored by quantifying heat consumption (produced at the installation or received from another installation) and attributing the heat to each process.
Indirect emissions from electricity consumed during production processes (irrespective of where electricity is produced) are to be monitored. This can be done by quantifying the amount of electricity consumed in each production process. Electricity produced on site should be monitored as other direct emissions on site. For the aluminium sector, indirect emissions are only reported during the transitional period.
Precursors relevant to each production process should monitored. Monitoring parameters depends on where precursors are produced. See Table 1 for your installation's relevant precursors.
If a precursor is produced within your installation, all relevant monitoring is completed via monitoring the direct and indirect emissions above.
If a precursor is purchased, you need to request relevant data from the installation that produced it. The relevant data to be requested includes:
Identifying information of the installation where the precursor was produced
Specific direct and indirect embedded emissions of the precursor
The production route
The reporting period
information regarding carbon prices, if applicable
In both cases, the quantities of precursors consumed should be monitored. The rules for monitoring precursor-related data are found in section E of Annex III to the Implementing Regulation.
Additional parameters for aluminium include those in the Table 2.
Step 4. Determine the methodology to monitor each parameter
Step 4. Determine the methodology to monitor each parameter
For quantities of fuels and materials (including precursors) used, you may either have measurement instruments available which tell you how much has been consumed during the reporting period (e.g. weighing belts, flow meters, heat meters, etc.) or you may determine the used amounts from purchase records and stock measurements at the end of each period.
For emission factors, you can either choose a “standard value” from applicable literature or from Annex VIII to the Implementing Regulation, or you can determine them based on laboratory analyses, for which the Implementing Regulation provides further rules in section B.5 of Annex III.
For continuous emission measurements, heat flow and electricity measurements you also need to define the instruments to use, and applicable calibration and maintenance measures.
As the very last resort, if you have no other methods available for monitoring your goods’ embedded emissions, and in particular if the producer of your precursors used does not provide the required data, you may use the default values for embedded emissions of CBAM goods (which include all relevant precursors) which the European Commission makes available for the purpose. A list of the goods for which default values are available can be found on the European Commission’s dedicated website.
Step 5. Compile your information
Step 5. Compile your information
Congratulations! You have completed the creation of your installation's monitoring methodology. You should now compile the information that was collected into one written documentation. It should be documented so that it follows the Monitoring Principles listed below. You should also include a diagram of your installation with the locations of all necessary instruments and sampling points. Record the names and contact information of the parties responsible for data collection and monitoring.
Principles of monitoring methodologies
Principles of monitoring methodologies
Completeness
The methodology covers all necessary parameters to determine the emissions of CBAM goods.
Consistency and comparability
The methodology shall be consistent and comparable over time.
Transparency
The methodology allows data to be obtained, recorded, compiled, analysed and documented, including assumptions, references, activity data, emission factors, calculation factors, data on embedded emissions of purchased precursors, measurable heat and electricity, default values of embedded emissions, information on a carbon price due, and any other data relevant in a transparent manner that enables the reproduction of data.
Accuracy
The methodology is neither systematically nor knowingly inaccurate.
Integrity of methodology
The methodology enables reasonable assurance of reported data.
Cost-effectiveness
The methodology is both accurate and economically feasible.
Continuous improvement
The methodology is regularly updated and checked for improvements.
Monitoring Methodology Template
The above Excel files contain a Monitoring Methodology Document (MMD) template that may be downloaded and used to complete your installation's monitoring requirements. The template contains directions and information for where more guidance may be found. Examples are provided. Select the corresponding Excel file to the Aggregated good your installation produces (unwrought aluminium or aluminium products).
Helpful Information:
Table 1. Aggregated goods and relevant precursors
Aggregated Goods Category | Relevant precursors |
Unwrought aluminium |
|
Aluminium products | Unwrought aluminium (differentiated between primary and secondary aluminium, if known), other aluminium products (if used in the production process) |
Table 2. Other specific monitoring requirements
Aggregated good | Monitoring requirement |
Unwrought aluminium |
|
Aluminium products |
|