The Carbon Border Adjustment Mechanism

Dear participants,
Welcome to the webinar session on the

HYDROGEN SECTOR

Please be patient, the webinar will start at

15:30 (CET).
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The Carbon Border Adjustment Mechanism (CBAM)

Webinar session on the Hydrogen sector

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Starting time: 15:30 (CET)

03 October 2023
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Housekeeping rules

✓ All participants are muted

✓ Webinar is being recorded and will be made public
✓ Video recording is not allowed
✓ Please write your questions in the chat – they will be answered at
the end of the webinar
✓ A feedback survey will appear on your screen at the end of webinar
✓ The presentation will be uploaded on the DG TAXUD CBAM
webpage, where you can also find additional materials.
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Zoom poll

Question:
Which entity defines you best?
• EU Member State
• EU Importers
• Non-EU country
• Non-EU producer
• Non-EU exporter
• International organisation
• NGO & think tank
• Law firm, consultancy
• Academia
• Other

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Webinar Agenda

❶ CBAM general overview

❷ Determination of embedded emissions in the hydrogen sector
❸ Overview of CBAM actors & reporting declarants
❹ Submitting CBAM reports

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Carbon Border Adjustment Mechanism

❶ CBAM general overview

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The aim of CBAM

Prevents carbon leakage

to ensure effectiveness of Complements and
EU climate policy reinforces the EU ETS

Contributes to decarbonisation
globally and to reaching climate
neutrality by 2050

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Reporting obligations in the transitional phase

October 2023 – December 2025

CBAM report containing the following:

No verification of emissions by
▪ Total quantity of goods imported during the EU-accredited verifier
preceding quarter
▪ Total embedded direct and indirect emissions
▪ The carbon price due in the country of origin
for the embedded emissions

Report to be submitted quarterly No CBAM certificates

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CBAM emissions during the transitional phase

In CBAM scope
Not in CBAM scope SCOPE SCOPE
2 1
Indirect Direct

Emissions
generated
Electricity consumed for the SCOPE from the SCOPE
production of CBAM goods 3 production 3
Indirect of CBAM Indirect
goods at
installation
level
Raw materials,
Input material under CBAM scope Consumption, transportation and
transportation and distribution,
(in the case of complex goods) distribution and end of life
previous waste, etc.

Upstream Company production Downstream

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Carbon Border Adjustment Mechanism

❷ Determination of embedded emissions:

Hydrogen

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Key Terms

Simple goods Complex goods Aggregated goods category

• goods produced from fuels and • goods produced from • group of CBAM goods with
raw materials considered to other CBAM goods (either simple different CN codes but
have zero embedded or other complex goods) similar characteristics
emissions under CBAM
• for each aggregated
goods category and
production route: provisions
on system boundaries
Production process Production route (inputs, outputs and
• chemical or physical processes • specific technology used in a corresponding emissions),
carried out in parts of an production process to emission monitoring and
installation to produce goods produce goods relevant precursors.
under an aggregated goods
category and its specified
system boundaries

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CBAM goods in the Hydrogen sector

AGGREGATED
CN CODE​ GREENHOUSE GAS​​
GOODS CATEGORY​

HYDROGEN

2804 10 000​ Hydrogen Carbon dioxide​​

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Steps to determine specific embedded emissions

Step 1. Define the system boundaries associated with the production processes

Step 2. Identify relevant parameters and methods, then carry out monitoring

Step 3. Attribute emissions to production processes and then to goods

Step 4. Add the specific embedded emissions of relevant precursors

Step 5. Determine the specific embedded emissions of CBAM goods

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Step 1: Define the system boundaries

Example for steam methane reforming

Production process (a)

Natural gas
CO2

Electricity Steam Heat export

reforming

Hydrogen
CN 2804 10

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Step 2: Monitoring – General

Direct emissions from fuels and materials Electricity produced, if relevant

• Standard method, mass balance,
continuous emissions monitoring

Direct emissions related to heat flows, Indirect emissions related to electricity

if relevant consumption
• Determine heat flows • Determine electricity consumption for the
• Emissions = heat flow × corresponding production of CBAM goods
emission factor

Waste gases, if relevant Precursors, if relevant

• Determine flows and calorific values • Determine precursor consumption
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Step 2: Monitoring – Direct emissions

❶ ❷
Calculation-based methodology Measurement-based methodology

Standard method Mass balance Continuous emissions

monitoring system
• determine quantities of fuels and • determine carbon content in all
input materials consumed fuels and input materials • measure GHG concentration
directly in the stack or using
• determine calculation factors such • determine carbon content in all
extractive procedures
as net calorific value and emission output materials
factor • measure flue gas flow
• determine emissions as difference
• determine emissions by between inputs and outputs • determine emissions
multiplying consumption with • typically relevant where carbon
calculation factors remains in the goods produced
(e.g. steel).

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Step 2: Monitoring – Other methods

1. Other monitoring and reporting methods until 31 December 2024,

if similar coverage and accuracy of emissions data:
▪ A carbon pricing scheme where the installation is located.
▪ A compulsory emission monitoring scheme where the installation is
located.
▪ An emission monitoring scheme at the installation which can include
verification by an accredited verifier.

2. Other referenced methods including default values until 31 July 2024

3. Estimation of up to 20% of the total embedded emissions in the case of

complex goods (includes the use of default values)

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Step 3: Attribution of direct emissions

Emissions related Emissions

Attributed direct to the attribution of Correction for related to
emissions of the measurable heat exported electricity
production process exported waste gases production

𝑨𝒕𝒕𝒓𝑬𝒎𝒅𝒊𝒓 = 𝑫𝒊𝒓𝑬𝒎∗ + 𝑬𝒎𝑯,𝒊𝒎𝒑𝒐𝒓𝒕 − 𝑬𝒎𝑯,𝒆𝒙𝒑𝒐𝒓𝒕 +𝑾𝑮𝒄𝒐𝒓𝒓,𝒊𝒎𝒑𝒐𝒓𝒕 − 𝑾𝑮𝒄𝒐𝒓𝒓,𝒆𝒙𝒑𝒐𝒓𝒕 − 𝑬𝒎𝒆𝒍,𝒑𝒓𝒐𝒅𝒖𝒄𝒆𝒅

Directly attributable Emissions related to Correction for

emissions as linked to the attribution of imported waste
source streams measurable heat gases
(exceptions for heat and imported
waste gases)
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Step 3: Attribution of indirect emissions

Attributed indirect Emission Emission factor of electricity

emissions of the factor of 1) General case: use of default values
production process electricity • average emission factor of the
country of origin, based on IEA data
• other emission factors based on
𝑨𝒕𝒕𝒓𝑬𝒎𝒊𝒏𝒅𝒊𝒓 = 𝑬𝒆𝒍,𝒄𝒐𝒏𝒔 × 𝑬𝑭𝒆𝒍 publicly available data
(average emission factor or CO2
emission factor)
Electricity 2) Use of actual emission factors, in the
consumed case of:
• direct technical connection or
• power purchase agreement
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Steps 4 & 5: Precursors and calculation of specific embedded emissions

𝑨𝒕𝒕𝒓𝑬𝒎𝒈 Attributed emissions

For simple goods 𝑺𝑬𝑬𝒈 =
(Step 5): 𝑨𝑳𝒈 (direct or indirect)

Specific embedded emissions (direct or indirect) Amount of goods produced

𝒏 Specific embedded
𝑨𝒕𝒕𝒓𝑬𝒎𝒈
For complex goods 𝑺𝑬𝑬𝒈 = + ෍ 𝒎𝒊 · 𝑺𝑬𝑬𝒊 emissions (direct or
using precursors as 𝑨𝑳𝒈
𝒊=𝟏 indirect) of the precursors
input (Steps 4 and 5):
Amount of
Specific embedded
precursors used per
emissions
goods produced
(direct or indirect)
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Worked Hydrogen example (1/4)

Example for steam methane reforming

Production process (a)

Natural gas
CO2

Electricity Steam Heat export

reforming

Hydrogen
CN 2804 10

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Worked Hydrogen example (2/4)

Total direct emissions attributed to hydrogen

Direct emissions AD (t) NCV (GJ/t) Energy (TJ) EF (t CO2/TJ) Emissions (t CO2)

Input natural gas 190 000 48 9 120 56,1 511 632

Heat export -800 56,1 -44 880

Total direct
emissions of the 466 752
installation

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Worked Hydrogen example (3/4)

Total indirect emissions attributed to hydrogen

Indirect emissions MWh EF (t CO2 / MWh) Emissions (t CO2)

Electricity consumption 33 000 0,36655 12 096

Total indirect emissions of the installation 12 096

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Worked Hydrogen example (4/4)

Calculation of embedded emissions of hydrogen product

Specific embedded emissions

Production Process total emissions
(SEE) (t CO2 / t H2)

Product Activity level (t) Direct Indirect Direct Indirect

Hydrogen 55 000 466 752 12 096 8,486 0,220

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Carbon Border Adjustment Mechanism

❸ Overview of CBAM actors &

reporting declarants

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Overview of the actors in CBAM

Customs
authorities

Information on CBAM obligations

Import data
Customs declarations

General analysis of
Operators of Emission Reporting CBAM European
information reported
data report Commission
installations declarants

Request for additional information or Conclusions

submission of report
Checks

National
Assessment of Indicative
competent
information assessment
authorities

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Who are the reporting declarants?

Rules for Representatives

No representation by others - Scope 3

Own import
Importer is Indirect
the Subject to
reporting declarant
Direct customs representative
(Status: Customs Declarant)
reporting
Consumption, transportation
and distribution and end of life

Importer or indirect
Indirect customs representative customs representative obligations
(Status: Importer) may be the reporting
Importer declarant

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Steps to comply with the CBAM reporting obligations

Step 1: Define the scope of goods concerned

Step 2: Determine the reporting period to use

Step 3: Identify all the parameters you need to report

Step 4: Collect data on carbon price due in jurisdiction if any

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Carbon Border Adjustment Mechanism

❹ Submitting CBAM reports

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Reporting in the CBAM Transitional Registry

Key highlights
Reporting Customs • Single platform to create
Declarants Authorities
synergies
• Tool to perform
CBAM-related tasks
CBAM European
Transitional Commission
• Secured platform to
Registry ensure confidentiality of
information​

Operators National
of Competent
installations Authorities OUTSIDE THE REGISTRY

VIA THE REGISTRY

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The CBAM Transitional Registry

https://cbam.ec.europa.eu/declarant
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Timeline for reporting declarants

MODIFICATION
REPORTING PERIOD SUBMISSION DUE BY
POSSIBLE UNTIL*
2023: October – December 2024: January 31 2024: July 31
2024: January – March 2024: April 30 2024: July 31
2024: April – June 2024: July 31 2024: August 30
2024: July – September 2024: October 31 2024: November 30
2024: October – December 2025: January 31 2025: February 28
2025: January – March 2025: April 30 2025: May 31
2025: April – June 2025: July 31 2025: August 31
2025: July – September 2025: October 31 2025: November 30
2025: October – December 2026: January 31 2026: February 28

*After the modification deadline, reporting declarants may request reopening of the file
before the national competent authority for eventual corrections.
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Where to find further information on CBAM?

Visit the CBAM webpage regularly – our one-stop shop

https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en

▪ Link to the CBAM Transitional Registry

▪ 2 guidance documents
▪ Communication template between importers and operators
▪ Registration to dedicated webinars
▪ Links to recordings of webinars through the Customs and Tax EU Learning portal
▪ Link to our E-learning materials through the Customs and Tax EU Learning portal
▪ Q&A and factsheet

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The Carbon Border Adjustment Mechanism - Hydrogen Sector

5 minutes break
We will resume the webinar in 5 min
to answer questions from the chat
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The Carbon Border Adjustment Mechanism - Hydrogen Sector

Thank you!