4) What Goods Are Covered by CBAM? Products and Sectors

Six Carbon-Intensive Sectors#

CBAM covers cement, iron and steel, aluminium, fertilisers, hydrogen, and electricity. These sectors were chosen because they have high emissions relative to production value, face significant international competition, and have established monitoring methodologies that could be adapted from EU ETS.

Each sector contains multiple product categories identified by Combined Nomenclature (CN) codes. CN codes are the EU eight-digit classification system for traded goods. Annex I of Regulation (EU) 2023/956 lists all covered CN codes.

Cement#

Coverage includes cement clinker (the intermediate product from heating limestone), various types of cement (Portland cement, aluminous cement, other hydraulic cements), and certain cement-containing products.

Clinker is covered because it represents the most carbon-intensive stage. Limestone calcination releases significant process emissions. Clinker also serves as a precursor material for finished cement.

The sector does not cover concrete, mortar, or prefabricated building elements despite containing cement. Future expansions may include these downstream products.

Iron and Steel#

Coverage is extensive. It includes iron ore products (sintered ore, pellets), pig iron, ferro-alloys (ferro-manganese, ferro-chromium, ferro-nickel), direct reduced iron, crude steel, and numerous finished steel products.

Finished products include flat-rolled products (hot-rolled coil, cold-rolled sheet, coated steel), long products (bars, rods, angles, sections), tubes and pipes, and certain fabricated steel articles. Coverage extends to stainless steel and other alloy steels.

The sector does not cover most fabricated steel products beyond basic shapes. Machinery, vehicles, appliances, and tools containing steel are not in scope.

Aluminium#

Coverage includes unwrought aluminium (primary aluminium from electrolytic reduction and secondary aluminium from scrap recycling) and aluminium products (extruded profiles, rolled sheet and plate, foil, tubes and pipes, and certain fabricated articles).

Primary aluminium production is extremely electricity-intensive. Electrolysis requires 13-15 MWh per tonne of aluminium. The carbon intensity of electricity generation determines whether primary aluminium has low emissions (hydropower, renewables) or high emissions (coal, gas).

The sector does not cover alumina (aluminium oxide), the intermediate product between bauxite ore and metallic aluminium.

Fertilisers#

Coverage includes ammonia, nitric acid, urea, ammonium nitrate, and various mixed fertilisers containing these compounds. These products are linked through production chains where ammonia serves as the base chemical.

Ammonia production is energy-intensive. Natural gas serves as both feedstock and fuel. Nitric acid production involves oxidising ammonia with potential for substantial N₂O emissions if abatement technologies are not used.

Hydrogen#

Coverage includes compressed hydrogen gas and liquefied hydrogen. Hydrogen is covered because it serves as an input to other CBAM goods (ammonia production, direct reduced iron production) and has widely varying emissions depending on production method.

Grey hydrogen from steam methane reforming typically has emissions of 9-12 tonnes CO₂ per tonne. Blue hydrogen with carbon capture reduces this. Green hydrogen from electrolysis using renewable electricity has near-zero emissions.

Electricity#

Electricity imported via interconnectors is covered. This applies to direct imports of electrical power from third countries into the EU grid. Electricity is measured in MWh rather than tonnes. The embedded emissions reflect the generation mix used to produce that electricity.

How to Determine Coverage#

Check Annex I of Regulation (EU) 2023/956. It lists all covered CN codes organised by sector. Your product CN code appears on customs declarations. If your CN code is listed in Annex I, your product is a CBAM good.

Product classification can be complex at boundaries. Steel products that have undergone extensive fabrication may no longer be classified as steel goods. Cement-containing products may be classified as construction materials rather than cement. The CN code classification is determinative.

Future Expansion#

Article 30 requires the Commission to report by 2028 on potential expansions. Topics include downstream products, organic chemicals, polymers, and inclusion of indirect emissions for sectors currently covering only direct emissions.

Downstream products present complexity because embedded emissions calculations require data from dozens or hundreds of suppliers. Organic chemicals and polymers are likely earlier candidates because production processes are more uniform and monitoring methodologies exist.

What This Means#

If you import any of the six covered sectors, determine whether your specific products fall within scope. Check CN codes against Annex I. Verify customs classifications are correct.

Classification at boundaries requires knowledge of CN nomenclature, CBAM scope provisions, and customs classification principles. When classification is ambiguous, obtaining binding tariff information from customs authorities provides certainty.