# European Commission issues CBAM guidance for iron and steel > EU issues CBAM guidance for iron and steel, clarifying how to calculate and report embedded emissions for 2026. > > **URL:** https://www.gosmarter.ai/blog/european-commission-cbam-guidance-for-iron-and-steel/ **Date:** 2026-08-20 **Author:** BlogSmarter AI **Categories:** blog The [European Commission](https://commission.europa.eu/index_en) has issued sector-specific guidance for iron and steel under the Carbon Border Adjustment Mechanism ([CBAM](/hubs/metals-manufacturing-glossary/#cbam-carbon-border-adjustment-mechanism)) — see the [official CBAM page](https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en) — setting out how operators outside the European Union should calculate and monitor embedded emissions during the definitive period beginning in 2026. The guidance divides iron and steel imports into six aggregated goods categories: sintered ore, ferro-alloys, pig iron, direct reduced iron (DRI), crude steel and iron or steel products. The final category spans a broad range of goods, including flat steel, bars, rods, wire, sections, tubes, pipes, structural products, tanks, containers and fasteners. ## Emissions scope for steel products For iron and steel products, embedded emissions during the definitive period will generally cover only direct emissions. The main exception is sintered ore classified under CN 2601 12 00, where electricity-related indirect emissions must also be calculated. If that sintered ore is later used as a precursor in another steel product, those indirect emissions must be carried forward into the downstream product’s embedded emissions. The Commission also said complex steel goods must include emissions embedded in relevant precursors such as sintered ore, pig iron, DRI, ferro-alloys and crude steel. Post-consumer scrap is treated as having zero embedded emissions, as are relevant precursors produced in the EU or in CBAM-exempt countries and territories. ## Electric arc furnace route and production "bubble" The guidance says that for crude steel made via the electric arc furnace route, electricity-related emissions are not included in definitive-period embedded emissions, even though electricity is the main energy input for that route. However, direct emissions from fuels, electrodes, carbon-containing materials and other relevant sources still need to be calculated. It also allows operators, in some cases, to group several production stages into a single production process, described as a "bubble". The Commission gave the example of an integrated steel producer combining sinter, pig iron and crude steel production with downstream operations when internally produced precursors are fully consumed within the installation and are not sold or transferred separately. ## Weighted averages and reporting requirements Where the same goods are produced through different routes at one installation, operators must generally calculate specific embedded emissions using a weighted average. The same approach applies to precursors obtained from different installations or production periods, unless there is enough evidence to link particular batches to a specific production process. The guidance also sets additional reporting requirements. For pig iron and DRI, operators must provide information including the main reducing agent and certain alloying-element contents. For crude steel and finished steel products, required information includes scrap consumption per tonne of product and the share of pre-consumer scrap. ## Using actual emissions data Operators that want to use actual emissions values must keep an English-language monitoring plan and retain supporting records for at least six years. The Commission said actual emissions data for externally sourced precursors can be used only if backed by a verification report from an appropriately accredited verifier. If not, the relevant default values must be used. ## Worked examples for imports The document includes worked examples for different steel products. In one case, an integrated blast furnace-basic oxygen furnace steelworks has specific embedded emissions of 1.567 mt of CO₂ per mt of finished steel, including indirect emissions linked to sinter production. For a hypothetical 2027 import of 10,000 mt of rails, that would amount to 15,670 mt of embedded emissions and, after the applicable free-allocation adjustment, an obligation to surrender 3,690 CBAM certificates before taking into account any eligible carbon price paid in the country of origin. In another example, stainless steel produced through the EAF/AOD route has calculated embedded emissions of 1.783 mt of CO₂ per mt for finished products. A hypothetical 100 mt import of stainless steel pipes in 2027 would lead to an obligation to surrender 95.9 CBAM certificates after the free-allocation adjustment and before any deduction for an eligible foreign carbon price. ## Material losses in downstream goods The guidance also addresses downstream goods such as screws and nuts. Because material lost during cutting and machining does not carry through into the final product, those losses can raise embedded emissions per tonne of finished goods. In the Commission’s example, specific embedded emissions reach 2.039 mt of CO₂ per mt for carbon steel screws and nuts and 2.371 mt per mt for stainless steel screws and nuts. The European Union said the sector-specific guidance is explanatory rather than legally binding, and that applicable European Union legislation takes precedence. ## What to do before 2026 If you import steel into the European Union, treat this as an ops job. - Map your imported products to CBAM goods categories. - Ask suppliers for verified actual emissions data now. - Make mill certificate carbon data searchable, not trapped in PDFs. - Set up a six-year record-retention process that someone owns. _[Read the source](https://eurometal.net/ec-publishes-sector-specific-cbam-guidance-for-iron-and-steel-to-help-non-eu-operators/)_