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.

Develop a methodology that is as straightforward as possible using the best and most reliable data sources, as outlined in section 6.4.4 of the Installation Monitoring Methodology. The methodology should include written procedures with clear instructions, specifying data locations and the assigned roles and responsibilities.

Extra information:

Aggregated Goods Category	Relevant precursors
Steel products	Ferro alloys (FeMn, FeCr, FeNi), pig iron, DRI, crude steel, iron or steel products (if used in the process)

Aggregated good	Monitoring requirement
Steel products	Main reducing agent used in precursor production (if known) Content of alloys in steel expressed as: Mass % of: Mn, Cr, Ni, and total of other alloying elements Tonnes of scrap used for producing one tonne of product % of scrap that is pre-consume

Guidance

What is a monitoring methodology?

A monitoring methodology suply all the required information for your CBAM data collection. The monitoring methodology document (MMD) ensures that monitoring activities are consistently conducted year after year. The MMD acts as a "rule book" for all your installation staff and for training new staff involved in the monitoring process.

You must document methods related to data collection, maintenance and calibration of meters, descriptions of various calculations and formulas used, sources of standard values, and any quality assurance methods.

The methodology should be accompanied by written procedures that include:

Managing responsibilities and competency of personnel: detailing roles and assigning responsibilities to key staff members
Data flow and control procedures
Quality assurance measures
Estimation methods for substituting data when data gaps are identified
Regular reviewing the monitoring methodology
Procedure for regularly reviewing and updating the list of products and precursors produced or imported by an installation

How do I create a monitoring methodology?

1. Define your installation's boundaries

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.

You can consult it in the Implementing Regulations 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.

Emissions for your installation

You can collect this data via metering data, invoices, production protocols or stock determination.

Identify which goods produced at your installation are covered by CBAM and to which aggregate goods category the goods belong.

Consult to Table 1 of the Implementing Regulations in Section 2 of Annex 2. Each added good will require a production process to be defined. You can also refer to Table 1 of this article.

Identify relevant production processes and routes producing your CBAM goods.

List the relevant process units, inputs, outputs, and emissions.
Drawing a schematic of your installation might be helpful.
Monitor the emissions of such units separately and attribute them to the production processes based on the amount of heat consumed in each process.

The system boundaries may differ depending if your installation make:

Single category of good:
The installation boundary and production process system boundary for monitoring and reporting embedded emissions are the same.
Several different unrelated categories:
You must define separate production process system boundaries within the single installation.
Same category of good by different production routes:
As an operator, you can define either a single production process system boundary or separate production process system boundaries of the different production routes. If you choose to assign separate processes, the embedded emissions for the goods will be calculated individually for each production route.
Category of complex good and its precursor:
Where this precursor is entirely used to produce the complex good, you may define a joint production process system boundary within the installation.
Non-CBAM goods
You need to define only production process system boundaries for the production processes relating to CBAM goods within the installation. However, it is recommended to also define an additional production process system boundary for the non-CBAM good to ensure that all relevant emissions have been covered, this as an improvement over the basic requirements.
Two or more goods from specific product groups , during the transitional period:
For example, sintered ore, pig iron, FeMn, FeCr, FeNi, DRI, crude steel, and iron or steel products. You can monitor and report embedded emissions by defining one joint production process (the 'bubble approach'), as long as none of the produced precursor materials are sold separately.

Section 3 of Annex II in the Implementing Regulation defines the system boundaries for direct emissions from various steel production production routes as follows:

All CO2 emissions from combustion of fuels and process emissions from flue gas treatment, related to production steps applied at the installation, including, but not limited to: re-heating, re-melting, casting, hot rolling, cold rolling, forging, pickling, annealing, plating, coating, galvanizing, wire drawing, cutting, welding and finishing of iron or steel products.

You may included in your installation's system boundaries the following production steps:

Raw material preparation: including pre-heating, re-melting and alloying
Forming processes for basic steel products: all forming process steps, including casting, hot and cold rolling, shaping by forging, wire drawing
Finishing activities: all finishing steps including surface treatment (such as pickling, annealing, plating, coating, galvanizing) and further fabrication (cutting, welding, finishing)
Emissions control: for treating releases to air, water or ground

2. Define your reporting period

The reporting period is the time during which your parameters will be monitored. Usually, this reporting period corresponds to one European calendar year, but the minimum duration is 3 months.

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 stationary fuel combustion processes including:

Coke
Waste gases (direct from the process or from other sources of waste gases in the steelworks
Fossil fuel inputs used both for combustion and as a reducing agent (coal, coke, fuel oils, natural gas, coal)

Emissions from reduction of iron and steel by reducing agents.

Emissions from thermal decomposition of carbonate materials (e.g. coke and natural gas).

Emissions from carbon content of scrap, alloys, graphite, and other carbon containing materials entering the process.

Emissions from emissions control (e.g. carbonate materials, such as soda ash, used for acidic flue gas cleaning).

Other process emissions including:

Graphite electrodes and electrode pastes.

Process materials like: lime, limestone and other additives, other fuels (biomass, biogas), carbon, contained with the ferrous scrap and alloys entering the process.
Combustion of fuels and process emissions from flue gas cleaning (depending on the different combination of production processes)

Direct emissions can be monitored using two approaches.

Calculation-Based Approach: In this method, you will determine the quantities of fuels and relevant materials consumed and identify the corresponding emission factors.
Measurement-Based Approach: In this method, you will measure the concentration of greenhouse gases and the flow of flue gases for each emission source.

Direct emissions related to heat flows must also be monitored. These emissions can be tracked by quantifying heat consumption, whether produced at the installation or received from another installation, and assigning the heat to each process.

Indirect emissions

Indirect emissions from electricity used during production processes must be monitored, regardless of where the electricity is produced. This involves quantifying the electricity consumed in each production process. Electricity produced on site should be monitored like other direct emissions. In the steel sector, indirect emissions are reported only during the transitional period.

You should monitor the precursors relevant to each production process. The monitoring parameters depend on the location where the precursors are produced. Refer to Table 1 to find the precursors relevant to your installation.

If a precursor is produced within your installation, you complete all relevant monitoring by tracking the direct and indirect emissions as described above.

If you purchase a precursor, you must request the relevant data from the installation that produced it. This data should include:

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 scenarios, you need to monitor the quantities of precursors consumed. The guidelines for monitoring precursor-related data are detailed in section E of Annex III of the Implementing Regulation. Additional parameters for steel products include those in the Table 2.

4. Determine the methodology to monitor each parameter

For the quantities of fuels and materials used (including precursors):
you can either use measurement instruments that track consumption during the reporting period (such as weighing belts, flow meters, or heat meters) or calculate the amounts based on 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 measurements of emissions, heat flow, and electricity:
you also need to specify the instruments to be used, along with the relevant calibration and maintenance procedures.
If you lack other methods to monitor the embedded emissions of your goods:
Especially if the producer of your precursors used does not supply the required data, you can use the default values for embedded emissions of CBAM goods provided by the European Commission. You can find a list of goods with available default values on the European Commission’s dedicated website. These default values cover all relevant precursors.

5. Compile your information

You have finished developing your installation’s monitoring methodology. Next, compile all the collected information into a single written document. Ensure that the documentation adheres to the Monitoring Principles outlined below. Additionally, include a diagram of your installation showing the locations of all necessary instruments and sampling points. Be sure to record the names and contact details of those responsible for data collection and monitoring.

Principles of monitoring methodologies

Completeness

The methodology addresses all essential parameters needed to determine the emissions of CBAM goods.

Consistency and Comparability

The methodology maintains consistency and allows for comparability over time.

Transparency

The methodology ensures that data can be obtained, recorded, compiled, analyzed, and documented transparently. This includes documenting assumptions, references, activity data, emission factors, calculation factors, data on embedded emissions of purchased precursors, measurable heat and electricity, default values for embedded emissions, information on a carbon price due, and any other relevant data in a transparent manner that enables the reproduction of data.

Accuracy

The methodology is neither systematically nor knowingly inaccurate.

Integrity of Methodology

The methodology provides reasonable assurance regarding the accuracy of reported data.

Cost-Effectiveness

The methodology is both precise and economically viable.

Continuous Improvement

The methodology is regularly reviewed and updated to incorporate improvements.