Commission Implementing Regulation (EU) 2023/1773 of 17 August 2023 laying down the rules for the application of Regulation (EU) 2023/956 of the European Parliament and of the Council as regards reporting obligations for the purposes of the carbon border adjustment mechanism during the transitional period (Text with EEA relevance)

For the monitoring of direct emissions, all emission sources and source streams associated with the production process shall be monitored, taking into account specific requirements laid down in Sections 3.2 to 3.19 of this Annex, where relevant, and the rules laid down in Annex III.

Where CO2 capture is used, the rules of Section B.8.2 of Annex III shall apply.

For the monitoring of indirect emissions, the total electricity consumption of each production process shall be determined, within the system boundaries defined in line with Sections 3.2 to 3.19 of this Annex and in accordance with Section A.4 of Annex III, where relevant. The relevant emission factor of electricity shall be determined in accordance with Section D.2 of Annex III.

If relevant precursors are specified, they refer to the corresponding aggregated goods categories.

3.2.   Calcined clay

3.2.1.   Special provisions

Clays falling under CN code 2507 00 80 which are not calcined, are assigned embedded emissions of zero. They shall be included in the CBAM report, but no additional information from the producer of the clay is required. The following provisions relate only to clays falling under that CN code and that are calcined.

3.2.2.   Production route

For calcined clay, direct emissions monitoring shall encompass:

• — All processes directly or indirectly linked to the production processes, such as raw material preparation, mixing, drying, and calcining, and flue gas cleaning.

• — CO2 emissions from the combustion of fuels as well as from raw materials, where relevant.

Relevant precursors: none.

3.3.   Cement clinker

3.3.1.   Special provisions

No distinction shall be made between grey and white cement clinker.

3.3.2.   Production route

For cement clinker, direct emissions monitoring shall encompass:

• — Calcination of limestone and other carbonates in the raw materials, conventional fossil kiln fuels, alternative fossil-based kiln fuels and raw materials, biomass kiln fuels (such as waste-derived fuels), non-kiln fuels, non-carbonate carbon content of limestone and shales, or alternative raw materials such as fly ash used in the raw meal in the kiln and raw materials used for flue gas scrubbing.

• — The additional provisions of Section B.9.2 of Annex III shall apply.

Relevant precursors: none.

3.4.   Cement

3.4.1.   Special provisions

None.

3.4.2.   Production route

For cement, direct emissions monitoring shall encompass:

• — All CO2 emissions from fuel combustion, where relevant for drying of materials.

Relevant precursors:

• — Cement clinker;

• — Calcined clay, if used in the process.

3.5.   Aluminous cement

3.5.1.   Special provisions

None.

3.5.2.   Production route

For aluminous cement, direct emissions monitoring shall encompass:

• — All CO2 emissions from fuel combustion directly or indirectly linked to the process.

• — Process emissions from carbonates in raw materials, if applicable, and flue gas cleaning.

Relevant precursors: none.

3.6.   Hydrogen

3.6.1.   Special provisions

Only the production of pure hydrogen or mixtures of hydrogen with nitrogen usable in ammonia production shall be considered. Not covered are the production of synthesis gas or of hydrogen within refineries or organic chemical installations, where hydrogen is exclusively used within those plants and not used for the production of goods listed in Annex I to Regulation (EU) 2023/956.

3.6.2.   Production routes

3.6.2.1.   Steam reforming and partial oxidation

For those production routes, direct emissions monitoring shall encompass:

• — All processes directly or indirectly linked to hydrogen production, and flue gas cleaning.

• — All fuels used in the hydrogen production process irrespective of their energetic or non-energetic use, and fuels used for other combustion processes including for the purpose of producing hot water or steam.

Relevant precursors: none.

3.6.2.2.   Electrolysis of water

For that production route, direct emissions monitoring shall encompass, if relevant:

• — All emissions from fuel use directly or indirectly linked to the hydrogen production process and from flue gas cleaning.

Indirect emissions: Where the produced hydrogen has been certified to comply with Commission Delegated Regulation (EU) 2023/1184 ([^E0005]), an emission factor of zero for the electricity may be used. In all other cases, the rules on indirect embedded emissions (Section D of Annex III) shall apply.

Relevant precursors: none.

Attribution of emissions to products: Where the co-produced oxygen is vented, all emissions of the production process shall be attributed to hydrogen. Where by-product oxygen is used in other production processes at the installation or sold, and where direct or indirect emissions are not equal to zero, the emissions of the production process shall be attributed to hydrogen based on molar proportions using the following equation:

Image omitted; see official source

(Equation 1)

Where:

• Image omitted; see official source are either the direct or indirect emissions attributed to hydrogen produced over the reporting period, expressed in tonnes of CO2;

• Em total are either the direct or indirect emissions of the whole production process over the reporting period, expressed in tonnes of CO2;

• Image omitted; see official source is the mass of oxygen sold or used in the installation over the reporting period, expressed in tonnes;

• Image omitted; see official source is the mass of oxygen produced over the reporting period, expressed in tonnes;

• Image omitted; see official source is the mass of hydrogen produced over the reporting period, expressed in tonnes;

• Image omitted; see official source is the molar mass of O2 (31,998 kg/kmol); and

• Image omitted; see official source is the molar mass of H2 (2,016 kg/kmol).

3.6.2.3.   Chlor-Alkali electrolysis and production of chlorates

For those production routes, direct emissions monitoring shall encompass, if relevant:

• — All emissions from fuel use directly or indirectly linked to the hydrogen production process and from flue gas cleaning.

Indirect emissions: Where the produced hydrogen has been certified to comply with Delegated Regulation (EU) 2023/1184, an emission factor of zero for the electricity may be used. In all other cases, the rules on indirect embedded emissions (Section D of Annex III) shall apply.

Relevant precursors: none.

Attribution of emissions to products: As hydrogen is considered a by-product in this production process, only a molar proportion of the overall process shall be attributed to the fraction of hydrogen sold or used as a precursor within the installation. Provided that direct or indirect emissions are not equal to zero, the emissions of the production process shall be attributed to hydrogen used or sold using the following equations:

Chlor-Alkali electrolysis:

Image omitted; see official source

(Equation 2)

Production of Sodium Chlorate:

Image omitted; see official source

(Equation 3)

Where:

• Image omitted; see official source are either the direct or indirect emissions attributed to hydrogen sold or used as precursor over the reporting period, expressed in tonnes of CO2;

• Em total are either the direct or indirect emissions of the production process over the reporting period, expressed in tonnes of CO2;

• Image omitted; see official source is the mass of hydrogen sold or used as precursor over the reporting period, expressed in tonnes;

• Image omitted; see official source is the mass of hydrogen produced over the reporting period, expressed in tonnes;

• Image omitted; see official source is the mass of chlorine produced over the reporting period, expressed in tonnes;

• m NaOH,prod is the mass of sodium hydroxide (caustic soda) produced over the reporting period, expressed in tonnes, calculated as 100 % NaOH;

• Image omitted; see official source is the mass of sodium chlorate produced over the reporting period, expressed in tonnes, calculated as 100 % NaClO3;

• Image omitted; see official source is the molar mass of H2 (2,016 kg/kmol);

• Image omitted; see official source is the molar mass of Cl2 (70,902 kg/kmol);

• M NaOH is the molar mass of NaOH (39,997 kg/kmol); and

• Image omitted; see official source is the molar mass of NaClO3 (106,438 kg/kmol).

3.7.   Ammonia

3.7.1.   Special provisions

Both hydrous and anhydrous ammonia shall be reported jointly as 100 % ammonia.

Where CO2 from ammonia production is used as feedstock for the production of urea or other chemicals, point (b) of Section B.8.2 of Annex III shall apply. Where a deduction of CO2 is allowed according to that section and where it would lead to negative specific embedded direct emissions of ammonia, the specific embedded direct emissions of ammonia shall be zero.

3.7.2.   Production routes

3.7.2.1.   Haber-Bosch process with steam reforming of natural gas or biogas

For that production route, direct emissions monitoring shall encompass:

• — All fuels directly or indirectly linked to ammonia production, and materials used for flue gas cleaning.

• — All fuels shall be monitored, irrespective of whether used as energetic or non-energetic input.

• — Where biogas is used, the provisions of Section B.3.3 of Annex III shall be applied.

• — Where hydrogen from other production routes is added to the process, it shall be treated as a precursor with its own embedded emissions.

Relevant precursors: separately produced hydrogen, if used in the process.

3.7.2.2.   Haber-Bosch process with gasification of coal or other fuels

That route applies where hydrogen is produced by gasification of coal, heavy refinery fuels or other fossil feedstock. Input materials may include biomass, for which the provisions of Section B.3.3 of Annex III shall be taken into account.

For that production route, direct emissions monitoring shall encompass:

• — All fuels directly or indirectly linked to ammonia production, and materials used for flue gas cleaning.

• — Each fuel input shall be monitored as one fuel stream, irrespective of whether it is used as energetic or non-energetic input.

• — Where hydrogen from other production routes is added to the process, it shall be treated as a precursor with its own embedded emissions.

Relevant precursors: separately produced hydrogen, if used in the process.

3.8.   Nitric acid

3.8.1.   Special provisions

Amounts of nitric acid produced shall be monitored and reported as 100 % nitric acid.

3.8.2.   Production route

For nitric acid, direct emissions monitoring shall encompass:

• — CO2 from all fuels directly or indirectly linked to nitric acid production, and materials used for flue gas cleaning;

• — N2O emissions from all sources emitting N2O from the production process, including unabated and abated emissions. Any N2O emissions from the combustion of fuels are excluded from monitoring.

Relevant precursors: Ammonia (as 100 % ammonia).

3.9.   Urea

3.9.1.   Special provisions

Where the CO2 used in the production of urea stems from ammonia production, it is accounted for as subtraction in the embedded emissions of ammonia as precursor of urea, if the provisions of Section 3.7 of this Annex allow such deduction. However, where ammonia produced without direct fossil CO2 emissions is used as a precursor, the used CO2 may be deducted from the direct emissions of the installation producing the CO2, provided that the delegated act adopted pursuant to Article 12(3b) of Directive 2003/87/EC defines urea production as a case where CO2 is permanently chemically bound so that it does not enter the atmosphere under normal use, including any normal activity taking place after the end of the life of the product. Where such deduction would lead to negative specific direct embedded emissions of urea, the specific direct embedded emissions of urea shall be zero.

3.9.2.   Production route

For urea, direct emissions monitoring shall encompass:

• — CO2 from all fuels directly or indirectly linked to urea production, and materials used for flue gas cleaning.

• — Where CO2 is received from another installation as process input, the CO2 received and not bound in urea shall be considered an emission, if not already counted as emission of the installation where the CO2 was produced, under an eligible monitoring, reporting and verification system.

Relevant precursors: Ammonia (as 100 % ammonia).

3.10.   Mixed fertilisers

3.10.1.   Special provisions

This section applies to the production of all kinds of nitrogen containing fertilisers, including ammonium nitrate, calcium ammonium nitrate, ammonium sulphate, ammonium phosphates, urea ammonium nitrate solutions, as well as nitrogen-phosphorus (NP), nitrogen-potassium (NK) and nitrogen-phosphorus-potassium (NPK) fertilisers. All kinds of operations are included such as mixing, neutralisation, granulation, prilling, irrespective of whether only physical mixing or chemical reactions take place.

The amounts of different nitrogen compounds contained in the final product shall be recorded in accordance with Regulation (EU) 2019/1009 of the European Parliament and of the Council ([^E0006]):

• — content of N as ammonium (NH4 ⁺);

• — content of N as nitrate (NO3 ^–);

• — content of N as Urea;

• — content of N in other (organic) forms.

The direct and indirect emissions of the production processes falling under this aggregated goods category may be determined for the whole reporting period and attributed to all mixed fertilisers on a pro-rata basis per tonne of final product. For each fertiliser grade, embedded emissions shall be calculated separately taking into account the relevant mass of precursors used and applying average embedded emissions during the reporting period for each of the precursors.

3.10.2.   Production route

For mixed fertilisers, direct emissions monitoring shall encompass:

• — CO2 from all fuels directly or indirectly linked to fertiliser production, such as fuels used in driers and for heating input materials, and materials used for flue gas cleaning.

Relevant precursors:

• — ammonia (as 100 % ammonia), if used in the process;

• — nitric acid (as 100 % nitric acid), if used in the process;

• — urea, if used in the process;

• — mixed fertilisers (in particular salts containing ammonium or nitrate), if used in the process.

3.11.   Sintered ore

3.11.1.   Special provisions

This aggregated goods category includes all kinds of iron ore pellet production (for sale of pellets as well as for direct use in the same installation) and sinter production. To the extent covered by CN code 2601 12 00 , also iron ores used as precursors for ferro-chromium (FeCr), ferro-manganese (FeMn) or ferro-nickel (FeNi) may be covered.

3.11.2.   Production route

For sintered ore, direct emissions monitoring shall encompass:

• — CO2 from process materials such as limestone and other carbonates or carbonatic ores;

• — CO2 from all fuels including coke, waste gases such as coke oven gas, blast furnace gas or converter gas; directly or indirectly linked to the production process, and materials used for flue gas cleaning.

Relevant precursors: none.

3.12.   FeMn (Ferro-Manganese), FeCr (Ferro-Chromium) and FeNi (Ferro-Nickel)

3.12.1.   Special provisions

This process covers only the production of the alloys identified under CN codes 7202 1, 7202 4 and 7202 6. Other iron materials with significant alloy content such as spiegeleisen are not covered. NPI (nickel pig iron) is included if the nickel content is greater than 10 %.

Where waste gases or other flue gases are emitted without abatement, CO contained in the waste gas shall be considered as the molar equivalent of CO2 emissions.

3.12.2.   Production route

For FeMn, FeCr and FeNi, direct emissions monitoring shall encompass:

• — CO2 emissions caused by fuel inputs, irrespective of whether they are used for energetic or non-energetic use;

• — CO2 emissions from process inputs such as limestone and from flue gas cleaning;

• — CO2 emissions from the consumption of electrodes or electrode pastes;

• — Carbon remaining in the product or in slags or wastes is taken into account by using a mass balance method in accordance with Section B.3.2 of Annex III.

Relevant precursors: Sintered ore, if used in the process.

3.13.   Pig iron

3.13.1.   Special provisions

This aggregated goods category includes non-alloyed pig iron from blast furnaces as well as alloy-containing pig irons (e.g. spiegeleisen), irrespective of the physical form (e.g. ingots, granules). NPI (nickel pig iron) is included if the nickel content is lower than 10 %. In integrated steel plants, liquid pig iron (‘hot metal’) directly charged to the oxygen converter is the product which separates the production process for pig iron from the production process of crude steel. Where the installation does not sell or transfer pig iron to other installations, there is no need to monitor emissions from pig iron production separately. A common production process including crude steel making and, subject to the rules of Section A.4 of Annex III, further downstream production may be defined.

3.13.2.   Production routes

3.13.2.1.   Blast furnace route

For that production route, direct emissions monitoring shall encompass:

• — CO2 from fuels and reducing agents such as coke, coke dust, coal, fuel oils, plastic wastes, natural gas, wood wastes, charcoal, as well as from waste gases such as coke oven gas, blast furnace gas or converter gas.

• — Where biomass is used, the provisions of Section B.3.3 of Annex III shall be taken into account.

• — CO2 from process materials such as limestone, magnesite, and other carbonates, carbonatic ores; materials for flue gas cleaning.

• — Carbon remaining in the product or in slags or wastes is taken into account by using a mass balance method in accordance with Section B.3.2 of Annex III.

Relevant precursors:

• — sintered ore;

• — pig iron or direct reduced iron (DRI) from other installations or production processes, if used in the process;

• — FeMn, FeCr, FeNi if used in the process;

• — hydrogen if used in the process.

3.13.2.2.   Smelting reduction

For this production route, direct emissions monitoring shall encompass:

• — CO2 from fuels and reducing agents such as coke, coke dust, coal, fuel oils, plastic wastes, natural gas, wood wastes, charcoal, waste gases from the process or converter gas, etc.

• — Where biomass is used, the provisions of Section B.3.3 of Annex III shall be taken into account.

• — CO2 from process materials such as limestone, magnesite, and other carbonates, carbonatic ores; materials for flue gas cleaning.

• — Carbon remaining in the product or in slags or wastes is taken into account by using a mass balance method in accordance with Section B.3.2 of Annex III.

Relevant precursors:

• — sintered ore;

• — pig iron or DRI from other installations or production processes, if used in the process;

• — FeMn, FeCr, FeNi if used in the process;

• — hydrogen if used in the process.

3.14.   DRI (Direct Reduced Iron)

3.14.1.   Special provisions

There is only one production route defined, although different technologies may use different qualities of ores, which may require pelletisation or sintering, and different reducing agents (natural gas, diverse fossil fuels or biomass, hydrogen). Therefore, precursors sintered ore or hydrogen may be relevant. As products, iron sponge, hot briquetted iron (HBI) or other forms of direct reduced iron may be relevant, including DRI which is immediately fed to electric arc furnaces or other downstream processes.

Where the installation does not sell or transfer DRI to other installations, there is no need to monitor emissions from DRI production separately. A common production process including steel making and, subject to the rules of Section A.4 of Annex III, further downstream production may be used.

3.14.2.   Production route

For this production route, direct emissions monitoring shall encompass:

• — CO2 from fuels and reducing agents such as natural gas, fuel oils, waste gases from the process or converter gas, etc.;

• — Where biogas or other forms of biomass are used, the provisions of Section B.3.3 of Annex III shall be taken into account;

• — CO2 from process materials such as limestone, magnesite, and other carbonates, carbonatic ores; materials for flue gas cleaning;

• — Carbon remaining in the product or in slags or wastes is taken into account by using a mass balance method in accordance with Section B.3.2 of Annex III.

Relevant precursors:

• — sintered ore, if used in the process;

• — hydrogen, if used in the process;

• — pig iron or DRI from other installations or production processes, if used in the process;

• — FeMn, FeCr, FeNi if used in the process.

3.15.   Crude steel

3.15.1.   Special provisions

The system boundaries shall cover all necessary activities and units for obtaining crude steel:

• — If the process starts from hot metal (liquid pig iron), the system boundaries shall include the basic oxygen converter, vacuum degassing, secondary metallurgy, argon oxygen decarburisation/vacuum oxygen decarburisation, continuous casting or ingot casting, where relevant hot-rolling or forging, and all necessary auxiliary activities such as transfers, re-heating and flue gas cleaning;

• — If the process uses an electric arc furnace, the system boundaries shall include all relevant activities and units such as the electric arc furnace itself, secondary metallurgy, vacuum degassing, argon oxygen decarburisation/vacuum oxygen decarburisation, continuous casting or ingot casting, where relevant hot-rolling or forging, and all necessary auxiliary activities such as transfers, heating of raw materials and equipment, re-heating and flue gas cleaning;

• — Only primary hot-rolling and rough shaping by forging to obtain the semi-finished products under CN codes 7207 , 7218 and 7224 are included in this aggregated goods category. All other rolling and forging processes are included in the aggregated goods category ‘iron or steel products’.

3.15.2.   Production routes

3.15.2.1.   Basic oxygen steelmaking

For that production route, direct emissions monitoring shall encompass:

• — CO2 from fuels such as coal, natural gas, fuel oils, waste gases such as blast furnace gas, coke oven gas or converter gas, etc.

• — CO2 from process materials such as limestone, magnesite, and other carbonates, carbonatic ores; materials for flue gas cleaning.

• — Carbon entering the process in scrap, alloys, graphite, etc. and carbon remaining in the product or in slags or wastes is taken into account by using a mass balance method in accordance with Section B.3.2 of Annex III.

Relevant precursors:

• — pig iron, DRI, if used in the process;

• — FeMn, FeCr, FeNi if used in the process;

• — crude steel from other installations or production processes if used in the process.

3.15.2.2.   Electric arc furnace

For that production route, direct emissions monitoring shall encompass:

• — CO2 from fuels such as coal, natural gas, fuel oils, as well as from waste gases such as blast furnace gas, coke oven gas or converter gas.

• — CO2 from the consumption of electrodes and electrode pastes.

• — CO2 from process materials such as limestone, magnesite, and other carbonates, carbonatic ores; materials for flue gas cleaning.

• — Carbon entering the process, e.g. in the form of scrap, alloys and graphite, and carbon remaining in the product or in slags or wastes is taken into account by using a mass balance method in accordance with Section B.3.2 of Annex III.

Relevant precursors:

• — pig iron, DRI, if used in the process;

• — FeMn, FeCr, FeNi if used in the process;

• — crude steel from other installations or production processes if used in the process.

3.16.   Iron or steel products

3.16.1.   Special provisions

Subject to the rules of Section A.4 of Annex III and Sections 3.11 to 3.15 of this Annex, the production process for iron or steel products may apply to the following cases:

• — System boundaries cover as one process all steps of an integrated steel plant from production of pig iron or DRI, crude steel, semi-finished products as well as final steel products under the CN codes listed in Section 2 of this Annex.

• — System boundaries cover the production of crude steel, semi-finished products and final steel products under the CN codes listed in Section 2 of this Annex.

• — System boundaries cover the production of final steel products under the CN codes listed in Section 2 of this Annex starting from crude steel, semi-finished products or from other final steel products under the CN codes listed in Section 2 which are either received from other installations or produced within the same installation but under a separate production process.

Double counting or gaps in the monitoring of production processes of an installation shall be avoided. The following production steps shall be covered by the production process of ‘iron or steel products’:

• — All production steps for producing goods covered by the CN codes given in Section 2 of this Annex for the aggregated goods category ‘iron or steel products’, which are not already covered by separate production processes for pig iron, DRI or crude steel, as required by Sections 3.11 to 3.15 of this Annex and as applied at the installation.

• — All production steps applied at the installation, starting from crude steel, including, but not limited to: re-heating, re-melting, casting, hot rolling, cold rolling, forging, pickling, annealing, plating, coating, galvanising, wire drawing, cutting, welding, finishing.

For products that contain more than 5 % by mass of other materials, e.g. insulation materials in CN code 7309 00 30 , only the mass of iron or steel shall be reported as the mass of the goods produced.

3.16.2.   Production route

For iron or steel products, direct emissions monitoring shall encompass:

• — 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, galvanising, wire drawing, cutting, welding and finishing of iron or steel products.

Relevant precursors:

• — crude steel, if used in the process;

• — pig iron, DRI, if used in the process;

• — FeMn, FeCr, FeNi, if used in the process;

• — iron or steel products, if used in the process.

3.17.   Unwrought aluminium

3.17.1.   Special provisions

This aggregated goods category includes non-alloyed as well as alloyed aluminium, in physical form typical for unwrought metals, such as ingots, slabs, billets or granules. In integrated aluminium plants, liquid aluminium directly charged to the production of aluminium products is included, too. Where the installation does not sell or transfer unwrought aluminium to other installations, there is no need to monitor emissions from unwrought aluminium production separately. A common production process including unwrought aluminium and, subject to the rules of Section A.4 of Annex III, further processes to produce aluminium products may be defined.

3.17.2.   Production routes

3.17.2.1.   Primary (electrolytic) smelting

For that production route, direct emissions monitoring shall encompass:

• — CO2 emissions from the consumption of electrodes or electrode pastes.

• — CO2 emissions from any fuels used (e.g. for drying and pre-heating of raw materials, heating of electrolysis cells, heating required for casting).

• — CO2 emissions from any flue gas treatment, from soda ash or limestone if relevant.

• — Perfluorocarbon emissions caused by anode effects monitored in accordance with Section B.7 of Annex III.

Relevant precursors: none.

3.17.2.2.   Secondary melting (recycling)

Secondary melting (recycling) of aluminium uses aluminium scrap as main input. However, where unwrought aluminium from other sources is added, it is treated like a precursor. Furthermore, where the product of this process contains more than 5 % alloying elements, the embedded emissions of the product shall be calculated as if the mass of alloying elements were unwrought aluminium from primary smelting.

For that production route, direct emissions monitoring shall encompass:

• — CO2 emissions from any fuels used for drying and pre-heating of raw materials, used in melting furnaces, in pre-treatment of scrap such as de-coating and de-oiling, and combustion of the related residues, and fuels required for casting of ingots, billets or slabs;

• — CO2 emissions from any fuels used in associated activities such as treatment of skimmings and slag recovery;

• — CO2 emissions from any flue gas treatment, from soda ash or limestone if relevant.

Relevant precursors:

• — Unwrought aluminium from other sources, if used in the process.

3.18.   Aluminium products

3.18.1.   Special provisions

Subject to the rules of Section A.4 of Annex III and Section 3.17 of this Annex, the production process for aluminium products may apply to the following cases:

• — System boundaries cover as one process all steps of an integrated aluminium plant from production of unwrought aluminium to semi-finished products as well as aluminium products under the CN codes listed in Section 2 of this Annex.

• — System boundaries cover the production of aluminium products under the CN codes listed in Section 2 of this Annex starting from semi-finished products or from other aluminium products under the CN codes listed in Section 2 which are either received from other installations or produced within the same installation but under a separate production process.

Double counting or gaps in the monitoring of production processes of an installation shall be avoided. The following production steps shall be covered by the production process of ‘aluminium products’:

• — All production steps for producing goods covered by the CN codes given in Section 2 of this Annex for the aggregated goods category ‘aluminium products’, which are not already covered by separate production processes for unwrought aluminium, as required by Section 3.17 of this Annex and as applied at the installation.

• — All production steps applied at the installation, starting from unwrought aluminium, including, but not limited to: re-heating, re-melting, casting, rolling, extruding, forging, coating, galvanising, wire drawing, cutting, welding, finishing.

Where the product contains more than 5 % by mass alloying elements, the embedded emissions of the product are shall be calculated as if the mass of alloying elements were unwrought aluminium from primary smelting.

For products that contain more than 5 % by mass of other materials, e.g. insulation materials in CN code 7611 00 00 only the mass of aluminum shall be reported as the mass of the goods produced.

3.18.2.   Production route

For aluminium products, direct emissions monitoring shall encompass:

• — All CO2 emissions from fuel consumption in processes forming aluminium products, and flue gas cleaning.

Relevant precursors:

• — unwrought aluminium, if used in the production process (treat primary and secondary aluminium separately, if data is known);

• — aluminium products, if used in the production process.

3.19.   Electricity

3.19.1.   Special provisions

For electricity, only direct emissions shall be monitored and reported. The emission factor for electricity shall be determined in accordance with Section D.2 of Annex III.

3.19.2.   Production routes

For electricity, direct emissions monitoring shall encompass:

• — Any combustion emissions and process emissions from flue gas treatment.

Relevant precursors: none.

ANNEX III

Rules for determining data including on emissions at installation level, attributed emissions of production processes, and embedded emissions of goods

A. PRINCIPLES

A.1.   Overall approach

• 1.For the purpose of determining embedded emissions of goods listed in Annex I to Regulation (EU) 2023/956, the following activities shall be performed:

• (a) The production processes relating to goods produced in the installation shall be identified using the aggregated goods categories as defined in Section 2 of Annex II, as well as the relevant production routes listed in Section 3 of Annex II, taking into account the rules for setting system boundaries of production processes in accordance with Section A.4 of this Annex.

• (b) At the level of the installation producing the goods, the direct emissions of the greenhouse gases specified in Annex II for those goods shall be monitored in line with the methods provided in Section B of this Annex.

• (c) Where measurable heat is imported to, produced in, consumed in or exported from the installation, net heat flows and the emissions associated with the production of that heat shall be monitored in line with the methods provided in Section C of this Annex.

• (d) For the purpose of monitoring indirect emissions embedded in the goods produced, the consumption of electricity in the relevant production processes shall be monitored in line with the methods provided in Section D.1 of this Annex. Where electricity is produced within the installation or by a source with a direct technical link, the emissions associated with that electricity production shall be monitored in order to determine the emission factor for that electricity. Where the installation receives electricity from the grid, the emission factor for that electricity shall be determined according to Section D.2.3 of this Annex. Any quantities of electricity transferred between production processes or exported from the installation shall be monitored as well.

• (e) The direct emissions at the installations, with heat production and consumption, electricity production and consumption, and any relevant waste gas streams shall be attributed to the production processes associated with the goods produced by applying the rules provided in Section F of this Annex. Those attributed emissions shall be used to calculate the specific direct and indirect embedded emissions of the goods produced, applying the Section F of this Annex.

• (f) Where Section 3 of Annex II defines relevant precursors for goods produced in the installations, making those goods ‘complex goods’, the embedded emissions of the relevant precursor shall be determined according to Section E of this Annex, and shall be added to the embedded emissions of the complex goods produced, by applying the rules provided in Section G of this Annex. Where precursors are themselves complex goods, that process shall be repeated recursively until no more precursors are at stake.

• 2.Where an operator cannot adequately determine actual data for one or more data sets, by applying methods provided in Section A.3 of this Annex, and where no other method for closing data gaps is available, the default values made available and published by the Commission for the transitional period may be used under the conditions specified in Article 4(3) of this Regulation. In that case, a short explanation of the reasons for not using actual data shall be added.

• 3.Monitoring shall cover a reporting period which ensures that non-representative data due to short-time fluctuations in the production processes and data gaps are avoided to the highest extent feasible. The default reporting period is a calendar year. However, the operator may choose as alternative:

• (a) if the installation has a compliance obligation under an eligible monitoring, reporting and verification system, that system’s reporting period may be used, if it covers at least three months;

• (b) the operator’s fiscal year provided such period ensures higher data quality than the use of the calendar year.

• The embedded emissions of goods shall be calculated as average of the reporting period chosen.

• 4.Regarding emissions occurring outside the installation boundaries that are relevant for calculating embedded emissions, data for the latest available reporting period shall be used, as obtained from the supplier of the input (e.g. electricity, heat, precursor). Emissions occurring outside the installation boundaries include:

• (a) indirect emissions where electricity is received from the grid;

• (b) emissions from electricity and heat imported from other installations;

• (c) embedded direct and indirect emissions of precursors received from other installations.

• 5.Emissions data over a full reporting period shall be expressed in tonnes CO2e rounded to full tonnes.

• All parameters used to calculate the emissions shall be rounded to include all significant digits for the purpose of calculating and reporting emissions.

• Specific direct and indirect embedded emissions shall be expressed in tonnes of CO2e per tonne of goods, rounded to include all significant digits, with a maximum of 5 digits after the comma.

A.2.   Monitoring principles

For the monitoring of actual data at installation level, and for data sets necessary for attributing emissions to goods, the following principles shall apply:

• 1. Completeness: The monitoring methodology shall cover all parameters necessary to determine the embedded emissions of the goods listed in Annex I to Regulation (EU) 2023/956 in accordance with the methods and formulae contained in this Annex.
• (a) Direct emissions at installation level include combustion and process emissions.
• (b) Direct embedded emissions include the attributed emissions of the relevant production process in accordance with Section F of this Annex, based on direct emissions at the installation, emissions related to relevant heat flows and to material flows between process system boundaries, including waste gases, if relevant. Direct embedded emissions furthermore include the direct embedded emissions of relevant precursors.
• (c) Indirect emissions at the installation level cover the emissions related to electricity consumption within the installation.
• (d) Indirect embedded emissions include the indirect emissions of the goods produced within the installation, and the indirect embedded emissions of relevant precursors.
• (e) For each parameter, an appropriate method in accordance with Section A.3 of this Annex shall be selected, ensuring that neither double counting nor data gaps occur.

• 1. Consistency and comparability: Monitoring and reporting shall be consistent and comparable over time. To that end, the selected methods shall be laid down in a written monitoring methodology documentation so that the methods are used consistently. The methodology shall be changed only if objectively justified. Relevant reasons include:
• (a) changes in the configuration of the instalation in the technology used, in the input materials and fuels, or in the goods produced;
• (b) new data sources or monitoring methods have to be introduced because of changes of trade partners responsible for data used in the monitoring methodology;
• (c) the accuracy of the data can be improved, data flows can be simplified or the control system can be improved.

• 1. Transparency: Monitoring data shall be obtained, recorded, compiled, analysed and documented, including assumptions, references, activity data, emission factors, calculation factors, data on embedded emissions of purchased precursors, measurable heat and electricity, default values of embedded emissions, information on a carbon price due, and any other data relevant for the purpose of this Annex, in a transparent manner that enables the reproduction of the determination of emissions data including by independent third parties, such as accredited verifiers. Documentation shall include a record of all changes of methodology. Complete and transparent records shall be kept at the installation of all data relevant for determining embedded emissions of the goods produced, including necessary supporting documents, for at least 4 years after the reporting period. Those records may be disclosed to a reporting declarant.

• 1. Accuracy: The chosen monitoring methodology shall ensure that emission determination is neither systematically nor knowingly inaccurate. Any source of inaccuracies shall be identififed and reduced as far as possible. Due diligence shall be exercised to ensure that the calculation and measurement of emissions exhibit the highest achievable accuracy. Where data gaps have occurred or are expected to be unavoidable, substitute data shall consist of conservative estimates. Further cases where emissions data shall be based on conservative estimates include:
• (a) carbon monoxide (CO) emitted to the atmosphere shall be calculated as the molar equivalent amount of CO2;
• (b) all biomass emissions in mass balances and for transferred CO2, where it is not possible to determine the biomass content in materials or fuels, the emissions shall be considered to be from fossil carbon.

• 1. Integrity of methodology: The chosen monitoring methodology shall enable reasonable assurance of the integrity of emission data to be reported. Emissions shall be determined using the appropriate monitoring methodologies set out in this Annex. Reported emission data shall be free from material misstatement, avoid bias in the selection and presentation of information, and provide a credible and balanced account of the embedded emissions of installation’s produced goods.

• 1. Optional measures to increase the quality of the data to be reported may be applied, in particular the data flow and control activities in line with Section H of this Annex.

• 1. Cost-effectiveness: In selecting a monitoring methodology, the improvements from greater accuracy shall be balanced against additional costs. Monitoring and reporting of emissions shall aim for the highest achievable accuracy, unless that is technically not feasible or incurs unreasonable costs.

• 1. Continuous improvement: It shall be regularly checked if monitoring methodologies can be improved. If verification of emissions data is performed, any recommendations for improvements included in the verification reports shall be considered for implementation within a reasonable timeframe, unless the improvement would incur unreasonable costs or would be technically not feasible.

A.3.   Methods representing the best available data source

• 1.For the determination of embedded emissions of goods, and for underlying data sets, such as emissions related to individual source streams or emission sources, quantities of measurable heat, the overarching principle shall be to always select the best available data source. For this purpose, the following guiding principles shall apply:

• (a) Monitoring methods described in this Annex are preferred. If for a specific data set there is no monitoring method described in this Annex, or it would incur unreasonable costs or is technically not feasible, monitoring methods from another eligible monitoring, reporting and verification system may be used under the conditions specified in Article 4(2) of this Regulation, if they cover the required data set. Where such methods are not available, not technically feasible, or would incur unreasonable costs, indirect methods for determination of the data set in accordance with point 2 may be used. Where such methods are not available, not technically feasible, or would incur unreasonable costs, default values made available and published by the Commission for the transitional period may be used under the conditions specified in Article 4(3) of this Regulation.

• (b) For direct or indirect determination methods, a method is deemed suitable where it is ensured that any metering, analyses, sampling, calibrations, and validations for the determination of the specific data set are carried out by applying methods defined in relevant EN or ISO standards. Where such standards are not available, national standards may be used. Where no applicable published standards exist, suitable draft standards, industry best practice guidelines or other scientifically proven methodologies shall be used, limiting sampling and measurement bias.

• (c) Within one method mentioned in point (a), measuring instruments or laboratory analyses under the operator’s control shall be preferred over measuring instruments or analyses under the control of another legal entity, such as the supplier of fuel or materials or trade partners regarding goods produced.

• (d) Measuring instruments shall be selected such that they exhibit the lowest uncertainty in use without incurring unreasonable costs. Instruments under legal metrological control are preferred, except where other instruments with significantly lower uncertainty in use are available. Instruments shall be used only in environments appropriate according to their use specification.

• (e) Where laboratory analyses are used, or where laboratories carry out sample treatment, calibrations, method validations, or activities relating to continuous emissions measurements, the requirements of Section B.5.4.3 of this Annex shall apply.

• 2.Indirect determination methods: Where no direct determination method is available for a required data set, in particular for cases where net measurable heat going into different production processes needs to be determined, an indirect determination method may be used, such as:

• (a) calculation based on a known chemical or physical process, using appropriate accepted literature values for the chemical and physical properties of substances involved, appropriate stoichiometric factors and thermodynamic properties such as reaction enthalpies, as appropriate;

• (b) calculation based on the installation’s design data such as the energy efficiencies of technical units or calculated energy consumption per unit of product;

• (c) correlations based on empirical tests for determining estimation values for the required data set from non-calibrated equipment or data documented in production protocols. For that purpose it shall be ensured that the correlation satisfies the requirements of good engineering practice and that it is applied only to determine values which fall into the range for which it was established. The validity of such correlations shall be evaluated at least once a year.

• 3.To determine the best available data sources, the data source highest in the ranking presented under point 1 and already available at the installation shall be selected. However, where it is technically feasible to apply a data source higher in the ranking without incurring unreasononable costs, such better data source shall be applied without undue dalay. Where different data sources are available for the same data set at the same level in the ranking presented under point 1, the data source which ensures the clearest data flow with lowest inherent risk and control risk regarding misstatements shall be chosen.

• 4.The data sources chosen under point 3 shall be used for the determination and reporting of embedded emissions.

• 5.To the extent feasible without incurring unreasonable costs, for the purpose of the control system in accordance with Section H of this Annex, additional data sources or methods for determining data sets shall be identified to allow corroboration of data sources under point 3. The selected data sources, if any, shall be laid down in the monitoring methodology documentation.

• 6.Recommended improvements: It shall be checked regularly, but at least once per year, whether new data sources have become available, for the purpose of improving the monitoring methods. In the case that such new data sources are considered more accurate in accordance with the ranking presented under point 1, they shall be laid down in the monitoring methodology documentation and be applied from the earliest date possible.

• 7.Technical feasibility: Where a claim is made that applying a specific determination methodology is technically not feasible, a justification for this fact shall be laid down in the monitoring methodology documentation. It shall be re-assessed during the regular checks in line with point 6. That justification shall be based on whether the installation has technical resources capable of meeting the needs of a proposed data source or monitoring method that can be implemented in the required time for the purposes of this Annex. Those technical resources shall include availability of required techniques and technology.

• 8.Unreasonable costs: Where a claim is made that applying a specific determination methodology for a data set incurs unreasonable costs, a justification for this fact shall be laid down in the monitoring methodology documentation. It shall be re-assessed during the regular checks in line with point 6. The unreasonable nature of the costs shall be determined as follows.

• Costs for determining a specific data set is considered unreasonable where the operator's cost estimation exceeds the benefit of a specific determination methodology. To that end, the benefit shall be calculated by multiplying an improvement factor with a reference price of EUR 20 per tonne of CO2e and costs shall include an appropriate depreciation period based on the economic lifetime of the equipment, where applicable.

• The improvement factor shall be:

• (a) the improvement of estimated uncertainty in a measurement, expressed in per cent, multiplied with the estimated related emissions over the reporting period. Related emissions means:
• (1) the direct emissions caused by the source stream or emission source concerned;
• (2) emissions attributed to a quantity of measurable heat;
• (3) the indirect emissions related to the quantity of electricity concerned;
• (4) embedded emissions of a material produced or of a precursor consumed;

• (b) 1 % of the related emissions, where no improvement of measuring uncertainty is involved.

• Measures relating to the improvement of an installation’s monitoring methodology shall not be deemed to incur unreasonable costs up to an accumulated amount of EUR 2 000 per year.

A.4.   Division of installations into production processes

Installations shall be divided into production processes with system boundaries which ensure that relevant inputs, outputs and emissions can be monitored in accordance with Sections B to E of this Annex and direct and indirect emissions can be attributed to groups of goods defined in Section 2 of Annex II, by applying the rules of Section F of this Annex.

Installations shall be divided into production processes as follows:

• (a) A single production process shall be defined for each of the aggregated goods categories defined in Section 2 of Annex II that are relevant at the installation.

• (b) By way of derogation from point (a), separate production processes shall be defined for each production route where different production routes in accordance with Section 3 of Annex II for the same aggregated goods category are applied in the same installation, or where the operator selects voluntarily different goods or groups of goods for separate monitoring. A more disaggregated definition of production processes may also be used where it is in accordance with an eligible monitoring, reporting and verification system applicable at the installation.

• (c) By way of derogation from point (a), where at least a part of the precursors relevant for complex goods are produced in the same installation as the complex goods, and where the respective precursors are not transferred out of the installation for sale or use in other installations, the production of precursors and complex goods may be covered by a joint production process. Separate calculation of embedded emissions of the precursors shall be omitted in that case.

• (d) The following sectoral derogations from point (a) may be applied:
• (1) Where two or more goods from the aggregated goods categories sintered ore, pig iron, FeMn, FeCr, FeNi, DRI, crude steel, or iron or steel products are produced in the same installation, the embedded emissions may be monitored and reported by defining one joint production process for all those goods.
• (2) Where two or more goods from the groups unwrought aluminium or aluminium products are produced in the same installation, the embedded emissions may be monitored and reported by defining one joint production process for all those goods.
• (3) For the production of mixed fertilisers, the monitoring and reporting for the respective production process may be simplified by determining one uniform value of embedded emissions per tonne of nitrogen contained in the mixed fertilisers, irrespective of the chemical form of nitrogen (ammonium, nitrate or urea forms).

• (e) Where a part of the installation serves the production of goods not listed in Annex I to Regulation (EU) 2023/956, it is a recommended improvement to monitor that part as one additional production process for the purpose of corroborating the completeness of the installation’s total emissions data.

B. MONITORING OF DIRECT EMISSIONS AT INSTALLATION LEVEL

B.1.   Completeness of source streams and emission sources

The boundaries of the installation and its production processes shall be clearly known to the operator and defined in the monitoring methodology documentation, taking into account the sector-specific requirements laid down in Section 2 of Annex II as well as Section B.9 of this Annex. The following principles shall apply:

• 1. As a minimum, all relevant greenhouse gas emissions emission sources and source streams associated directly or indirectly with the production of goods listed in Section 2 of Annex II shall be covered.

• 1. It is a recommended improvement to cover all emission sources and source streams of the total installation, in order to perform plausibility checks and to control the energy and emissions efficiency of the installation as a whole.

• 1. All emissions from regular operations shall be included, as well as from abnormal events, including start-up, shut-down and emergency situations, over the reporting period.

• 1. Emissions from mobile machinery for transportation purposes shall be excluded.

B.2.   Choice of monitoring methodology

The applicable methodology shall be either:

• 1. The calculation-based methodology, which consists in determining emissions from source streams on the basis of activity data obtained by means of measurement systems and additional parameters from laboratory analyses or standard values. The calculation-based methodology may be implemented according to the standard method or the mass balance method.

• 1. The measurement-based methodology, which consists in determining emissions from emission sources by means of continuous measurement of the concentration of the relevant greenhouse gas in the flue gas and of the flue gas flow.

By way of derogation, other methodologies may be used under the conditions specified in Articles 4(2), 4(3) and 5 of this Regulation.

The monitoring methodology that gives the most accurate and reliable results shall be chosen, except where sector-specific requirements in accordance with Section B.9 require one particular methodology. The applied monitoring methodology may be a combination of methodologies such that different parts of the installation’s emissions are monitored by either of the applicable methodologies.

The monitoring methodology documentation shall clearly identify:

• (a) for which source stream the calculation-based standard method or the mass balance method is used, including the detailed description of the determination of each relevant parameter provided in Section B.3.4 of this Annex;

• (b) for which emission source a measurement-based methodology is used, including the description of all relevant elements provided in Section B.6 of this Annex;

• (c) by means of a suitable diagram and process description of the installation, evidence that there is neither double counting nor data gaps in the emissions of the installation.

The installation’s emissions shall be determined by

Image omitted; see official source

(Equation 4)

Where:

• EmInst are the (direct) emissions of the installation expressed in tonnes CO2e;

• Emcalc,i are the emissions from source stream i determined using a calculation-based methodology expressed in tonnes CO2e;

• Emmeas,j are the emissions from emission source j determined using a measurement-based methodology expressed in tonnes CO2e; and

• Emother,k Emissions determined by another method, index k expressed in tonnes CO2e.

B.3.   Formulae and parameters for the calculation-based methodology for CO2

B.3.1.   Standard method

Emissions shall be calculated separately for each source stream as follows:

B.3.1.1.   Combustion emissions

Combustion emissions shall be calculated using the standard method as follows:

Image omitted; see official source

(Equation 5)

Where:

• Emi are the emissions [t CO2] caused by fuel i;

• EFi is the emission factor [t CO2/TJ] of fuel i;

• ADi is the activity data [TJ] of fuel i, calculated as:

Image omitted; see official source

(Equation 6)

• FQi is the fuel quantity consumed [t or m³] of fuel i;

• NCVi is the net calorific value (lower heating value) [TJ/t or TJ/m³] of fuel i;

• OFi is the oxidation factor (dimensionless) of fuel i, calculated as:

Image omitted; see official source

(Equation 7)

• Cash is the carbon contained in ash and flue gas cleaning dust; and

• Ctotal is the total carbon contained in the fuel combusted.

The conservative assumption that OF = 1 may always be used in order to reduce monitoring efforts.

Provided that this leads to a higher accuracy, the standard method for combustion emissions may be modified as follows:

• (a) the activity data is expressed as fuel quantity (i.e. in t or m³);

• (b) the EF is expressed in t CO2/t fuel or t CO2/m³ fuel, as applicable; and

• (c) the NCV may be omitted from the calculation. However, it is a recommended improvement to report NCV for allowing consistency checking and monitoring of the energy efficiency of the whole production process.

If the emission factor of a fuel i is to be calculated from the analyses of carbon content and NCV, the following equation shall be used:

Image omitted; see official source

(Equation 8)

If the emission factor of a material or fuel expressed in t CO2/t is to be calculated from an analysed carbon content, the following equation is used:

Image omitted; see official source

(Equation 9)

Where:

• f is the ratio of the molar masses of CO2 and C: f = 3,664 t CO2/t C.

As the emission factor of biomass shall be zero provided that the criteria given in Section B.3.3 are met, this fact may be taken into account for mixed fuels (i.e. fuels which contain both fossil and biomass components) as follows:

Image omitted; see official source

(Equation 10)

Where:

• EFpre,i is the preliminary emission factor of fuel i (i.e. emission factor assuming the total fuel is fossil); and

• BFi is the biomass fraction (dimensionless) of fuel i.

For fossil fuels and where the biomass fraction is not known, BFi shall be set to the conservative value zero.

B.3.1.2.   Process emissions

Process emissions shall be calculated using the standard method as follows:

Image omitted; see official source

(Equation 11)

Where:

• ADj is the activity data [t of material] of material j;

• EFj is the emission factor [t CO2/t] of material j; and

• CFj is the conversion factor (dimension-less) of material j.

The conservative assumption that CFj = 1 may always be used in order to reduce monitoring efforts.

In the case of mixed process input materials which contain inorganic as well as organic forms of carbon, the operator may choose either:

• 1. to determine a total preliminary emission factor for the mixed material by analysing the total carbon content (CCj), and using a conversion factor and, where applicable a biomass fraction and net calorific value related to that total carbon content; or

• 1. to determine the organic and inorganic contents separately and treat them as two separate source streams.

Considering the available measurement systems for activity data and methods for determining the emission factor, for emissions from the decomposition of carbonates, the method giving the more accurate results shall be chosen for each source stream from the following two methods:

• — Method A (Input-based): The emission factor, conversion factor and activity data shall be related to the amount of material input into the process. The standard emission factors of pure carbonates as provided in Table 3 in Annex VIII shall be used, taking into account the composition of the material as determined in line with Section B.5 of this Annex.

• — Method B (Output-based): The emission factor, conversion factor and activity data shall be related to the amount of output from the process. The standard emission factors of metal oxides after decarbonatisation as provided in Table 4 in Annex VIII shall be used, taking into account the composition of the relevant material as determined in line with Section B.5 of this Annex.

For CO2 process emissions other than from carbonates, method A shall be applied.

B.3.2.   Mass balance method

The CO2 quantities relevant for each source stream shall be calculated based on the carbon content in each material, without distinguishing fuels and process materials. Carbon leaving the installation in products instead of being emitted is taken into account by output source streams, which have therefore negative activity data.

The emissions corresponding to each source stream shall be calculated as follows:

Image omitted; see official source

(Equation 12)

Where:

• ADk is the activity data [t] of material k; for outputs, ADk is negative;

• f is the ratio of the molar masses of CO2 and C: f = 3,664 t CO2/t C; and

• CCk is the carbon content of material k (dimensionless and positive).

If the carbon content of a fuel k is calculated from an emission factor expressed in t CO2/TJ, the following equation shall be used:

Image omitted; see official source

(Equation 13)

If the carbon content of a material or fuel k is calculated from an emission factor expressed in t CO2/t, the following equation shall be used:

Image omitted; see official source

(Equation 14)

For mixed fuels, meaning fuels which contain both fossil and biomass components or mixed materials, the biomass fraction may be taken into account, provided that the criteria provided in Section B.3.3 are met as follows:

Image omitted; see official source

(Equation 15)

Where:

• CCpre,k is the preliminary carbon content of fuel k (i.e. emission factor assuming the total fuel is fossil); and

• BFk is the biomass fraction of fuel k (dimensionless).

For fossil fuels or materials and where the biomass fraction is not known, BF shall be set to the conservative value zero. Where biomass is used as input material or fuel, and output materials contain carbon, the overall mass balance shall treat the biomass fraction conservatively, meaning that the fraction of biomass in total output carbon shall not exceed the total fraction of biomass contained in input materials and fuels, except if the operator provides evidence of a higher biomass fraction in the output materials by a ‘trace the atom’ (stoichiometric) method or by ¹⁴C analyses.

B.3.3.   Criteria for zero-rating of biomass emissions

Where biomass is used as a fuel for combustion, it shall fulfil the criteria of this section. Where the biomass used for combustion does not comply with these criteria, its carbon content shall be considered as fossil carbon.

• 1. The biomass shall comply with the sustainability and the greenhouse gas emissions saving criteria laid down in paragraphs 2 to 7 and 10 of Article 29 of Directive (EU) 2018/2001.

• 1. By derogation from the previous point, biomass contained in or produced from waste and residues, other than agricultural, aquaculture, fisheries and forestry residues shall fulfil only the criteria laid down in Article 29(10) of Directive (EU) 2018/2001. This point shall also apply to waste and residues that are first processed into a product before being further processed into fuels.

• 1. Electricity, heating and cooling produced from municipal solid waste shall not be subject to the criteria laid down in paragraph 10 of Article 29 of Directive (EU) 2018/2001.

• 1. The criteria laid down in paragraphs 2 to 7 and 10 of Article 29 of Directive (EU) 2018/2001 shall apply irrespective of the geographical origin of the biomass.

• 1. The compliance with the criteria laid down in paragraphs 2 to 7 and 10 of Article 29 of Directive (EU) 2018/2001 shall be assessed in accordance with Articles 30 and 31(1) of that Directive.

B.3.4.   Relevant parameters

In line with the formulae given in Sections B.3.1 to B.3.3 of this Annex, the following parameters shall be determined for each source stream:

• 1. Standard method, combustion:
• — Minimum requirement: Fuel quantity (t or m³), Emission factor (t CO2/t or t CO2/m³).
• — Recommended improvement: Fuel quantity (t or m³), NCV (TJ/t or TJ/m³), Emission factor (t CO2/TJ), Oxidation factor, Biomass fraction, evidence for meeting the criteria of Section B.3.3.

• 1. Standard method, process emissions:
• — Minimum requirement: Activity data (t or m³), Emission factor (t CO2/t or t CO2/m³).
• — Recommended improvement: Activity data (t or m³), Emission factor (t CO2/t or t CO2/m³), conversion factor.

• 1. Mass balance:
• — Minimum requirement: Material quantity (t), Carbon content (t C/t material).
• — Recommended improvement: Material quantity (t), Carbon content (t C/t material), NCV (TJ/t), biomass fraction, evidence for meeting the criteria of Section B.3.3.

B.4.   Requirements for activity data

B.4.1.   Continual or batch-wise metering

Where quantities of fuels or materials, including goods or intermediate products, have to be determined for a reporting period, one of the following methods may be chosen and laid down in the monitoring methodology documentation:

• 1. based on continual metering at the process where the material is consumed or produced;

• 1. based on aggregation of metering of quantities separately (batch-wise) delivered or produced taking into account relevant stock changes. For this purpose the following shall apply:
• (a) the quantity of fuel or material consumed during the reporting period shall be calculated as the quantity of fuel or material imported during the reporting period, minus the quantity of fuel or material exported, plus the quantity of fuel or material in stock at the beginning of the reporting period, minus the quantity of fuel or material in stock at the end of the reporting period;
• (b) the production levels of goods or intermediate products shall be calculated as the quantity exported during the reporting period, minus the quantity imported, minus the quantity of product or material in stock at the beginning of the reporting period, plus the quantity of product or material in stock at the end of the reporting period. For avoiding any double counting, products of a production process returned into the same production process are deducted from production levels.