Understanding CBAM for Steel and Iron Products

The steel and iron sector represents one of the most significant areas covered by the EU’s Carbon Border Adjustment Mechanism (CBAM). As an energy-intensive industry responsible for approximately 8% of global CO2 emissions, understanding embedded carbon calculations for steel is crucial for importers and manufacturers.

Production Routes and Emissions Sources

Steel production emissions vary significantly based on the production route:

• Basic Oxygen Furnace (BOF) route: Starting from iron ore, typically emitting 2-2.5 tonnes CO2 per tonne of steel
• Electric Arc Furnace (EAF) route: Using recycled scrap, typically emitting 0.3-0.4 tonnes CO2 per tonne of steel

What This Calculator Covers

This calculator handles both primary steelmaking routes and includes:

• Direct emissions from the steelmaking process
• Indirect emissions from electricity consumption
• Emissions from input materials (including lime and carbon electrodes)
• Process-specific emissions factors
• Country-specific electricity grid factors

Mathematical Basis

The embedded emissions calculation follows this formula:

For Basic Oxygen Furnace (BOF) route:

CopyTotal Emissions = (Iron Ore × 0.5) + (Coking Coal × 3.02) + (Limestone × 0.44) + 
                  (Process Emissions × 1) + (Electricity × Grid Factor)

Where:
- Iron Ore factor (0.5) represents tCO2/t for sintering/pelletizing
- Coking Coal factor (3.02) includes both thermal and process emissions
- Limestone factor (0.44) is based on stoichiometric CO2 release
- Process emissions vary by facility efficiency
- Grid Factor is country-specific (e.g., China = 0.581 tCO2/MWh)

For Electric Arc Furnace (EAF) route:

CopyTotal Emissions = (Scrap × 0.08) + (Carbon Electrodes × 3.00) + 
                  (Electricity × Grid Factor) + (Lime × 0.44)

Where:
- Scrap factor (0.08) represents preprocessing emissions
- Carbon Electrode factor (3.00) based on combustion emissions
- Lime factor (0.44) from limestone decomposition

Data sources:

• Emission factors: EU ETS benchmarking data
• Grid intensity: IEA country-specific data
• Process emissions: IPCC Guidelines for National Greenhouse Gas Inventories
• Material factors: Commission Implementing Regulation (EU) 2018/2066