CBAM is becoming an electrical engineering problem - On-the-Ground CBAM Execution in Serbia

Why exporters now need metering architecture, not only emissions reporting

Engineering services by Clarion.Engineer

The European Commission’s technical study on indirect emissions in CBAM should be read as a turning point. The study, published through DG TAXUD on 8 June 2026, frames three policy questions: how operational default emission factors for indirect emissions should be determined; when declarants should be allowed to claim actual indirect emissions, including through direct technical links, PPAs and verification; and whether indirect-emissions coverage should be extended to additional CBAM sectors.

CBAM is becoming an engineering problem.
The new indirect-emissions study does not only affect carbon accounting, legal reporting or importer paperwork. It changes the physical readiness question for exporters: can the plant’s electrical architecture prove the electricity claim behind the CBAM number?

For exporters, the message is simple: electricity is no longer background energy consumption. It is becoming a compliance object.

Until now, many CBAM discussions have focused on direct emissions: fuel combustion, process emissions, calcination, reduction agents, furnace routes, hydrogen pathways and precursor emissions. Those remain essential. But the Commission’s new work on indirect emissions brings a second layer into the foreground: the electricity consumed in producing CBAM goods, the emissions factor applied to that electricity and the evidence needed to support any claim that the electricity was low-carbon.

This is where CBAM stops being only an emissions calculation and becomes an engineering due-diligence exercise.

The new CBAM question: Can the plant prove its electricity?

Indirect emissions are determined by multiplying the electricity consumed during production by the applicable electricity emission factor. The Commission FAQ also states that the electricity emission factor may be based on the grid supplying the electricity or, where CBAM rules allow, an actual electricity emission factor.

That formula looks simple. In practice, it creates a complex evidence chain.

A plant must be able to answer:

What electricity was consumed?
Not only at the site gate, but by installation, production process, product route, auxiliary system and, where possible, CBAM product category.

When was it consumed?
Monthly data may not be enough where PPA matching, onsite generation, settlement periods or verifier sampling require stronger time resolution.

Where did it come from?
Grid import, onsite generation, behind-the-meter renewable assets, direct technical links, PPAs, supplier contracts and certificate systems may each create different evidence requirements.

How was it allocated?
If one plant produces multiple products, serves EU and non-EU markets, uses shared auxiliaries or operates several production routes, the electricity allocation method becomes a technical risk point.

Can it survive verification?
Supplier statements and green certificates alone may not be enough if the underlying metering, contractual and operational evidence is weak.

This is the reason CBAM readiness now requires electrical metering architecture.

Why defaults are a commercial risk

The definitive-period CBAM regime already includes default values. The Commission’s CBAM legislation and guidance page states that default values have been published and that the legally binding values are set out in Commission Implementing Regulation (EU) 2025/2621.

The Commission FAQ also explains that authorised CBAM declarants may use default values for CBAM goods other than electricity where verified actual embedded-emissions data are not available, and that default values are country- and year-specific.

For exporters, this creates a clear business risk. Weak electricity data can push the importer toward default values. Defaults may be administratively easier, but they are not necessarily commercially optimal. For a producer in a carbon-intensive grid, the difference between a default factor and a verified actual electricity claim may become a price, margin and market-access issue.

The practical implication is direct: a producer that cannot prove electricity consumption and electricity origin may lose the ability to defend a lower embedded-emissions figure.

The PPA opportunity — and the PPA trap

The study’s second policy question is especially important because it focuses on actual indirect-emissions claims, including direct technical links, PPAs and verification.

This creates a major opportunity for renewable developers, industrial exporters and EU buyers. A well-structured renewable PPA can become more than an energy procurement contract. It can become part of a CBAM value strategy.

But there is a trap: not every green PPA will be CBAM-ready.

A generic green electricity contract may create a sustainability claim, but CBAM requires a stronger evidentiary logic. The Commission’s earlier transitional-period default-values document allowed actual electricity emission factors where there is either a direct technical link between the production installation and the electricity generation source, or a PPA between the consumer and producer for an equivalent amount of electricity.

That means a CBAM-relevant PPA should be engineered around evidence, not only price. The contract should be supported by metering points, generation data, delivery shape, settlement records, guarantees of origin or equivalent certificate controls, matching methodology, balancing treatment and verifier access.

The new commercial product is not simply “green electricity.”
It is CBAM-verifiable electricity.

Why this matters for Serbia and Southeast Europe

For Serbia, the Western Balkans and Southeast Europe, this is strategically important. Many industrial exporters sell steel, aluminium, cement, fertilisers, hydrogen-related products, components or precursors into the EU market. Many also operate in power systems where grid-emission intensity, renewable procurement structures and metering maturity vary significantly.

The current CBAM FAQ states that CBAM scope is limited to direct emissions for iron/steel, aluminium and hydrogen, while cement, fertilisers and agglomerated iron ore must declare both direct and indirect emissions. It also states that indirect emissions are taken into account only for the CBAM goods for which indirect emissions fall within scope.

That current scope should not create complacency. The Commission’s study expressly examines whether and how indirect-emissions coverage could be extended to additional CBAM sectors.

For aluminium, electric arc furnace steel, rolling mills, ferroalloys, cement grinding, fertilisers, hydrogen and power-intensive processing, the strategic direction is clear: electricity evidence will become a competitive variable.

The missing layer: Engineering before verification

Many companies approach CBAM through legal, tax, customs or ESG reporting channels. That is necessary, but incomplete.

Before a verifier can verify, someone must establish whether the physical and digital plant evidence exists. That is an engineering task.

A CBAM electricity-evidence review should examine:

the plant single-line diagram;
grid import and export interfaces;
transformer and substation metering;
process-level and line-level meters;
SCADA, EMS and meter-data systems;
onsite generation metering;
PPA settlement data;
guarantees of origin or equivalent certificate controls;
production-process boundaries;
electricity allocation by CN code, product route and EU export volume;
reconciliation between MWh consumed and tonnes produced;
evidence gaps that could force default-value use.

This is closer to Owner’s Engineer work than classic reporting support. The question is not only whether the emissions calculation is mathematically correct. The question is whether the plant architecture can support the claim.

The Clarion.Engineer service thesis

Clarion.Engineer positions CBAM readiness as a technical infrastructure problem.

The service model is built around four layers.

1. CBAM electrical metering architecture review

Clarion.Engineer maps the physical electricity system behind the CBAM claim: grid connection, substations, transformers, main meters, process meters, auxiliary loads, self-generation, direct links, PPA interfaces and excluded loads.

The output is a CBAM meter hierarchy showing which meters support which production processes and where evidence gaps exist.

2. Product-level electricity allocation model

CBAM does not need only site-level MWh. It needs electricity allocation that can be linked to production boundaries and product categories.

Clarion.Engineer develops the allocation logic for complex plants: shared equipment, multiple production routes, auxiliaries, EU and non-EU production, precursors and downstream processing.

The output is a product-level electricity allocation model that can be reviewed by importers, auditors and verifiers.

3. PPA and low-carbon electricity evidence pack

A PPA should not sit separately from the CBAM file. It should be translated into an engineering evidence package.

Clarion.Engineer reviews whether the PPA claim is supported by generation evidence, metering, settlement data, delivery periods, matching logic, certificate treatment and verification access.

The output is a CBAM-ready PPA evidence file.

4. Importer and verifier data room

EU importers are legally responsible for CBAM declarations. The Commission FAQ states that importers must be authorised CBAM declarants from 1 January 2026, and that the first annual CBAM declaration for the 2026 import year is due by 30 September 2027, together with certificate surrender.

That means importers will increasingly demand structured evidence from non-EU suppliers.

Clarion.Engineer prepares the technical data room: meter registry, monthly readings, SCADA extracts, PPA records, certificates, production allocation, emission-factor assumptions, reconciliation checks and gap-closing actions.

The output is a verifier-facing CBAM electricity evidence dashboard.

The winners

The companies that win under CBAM will not be the ones with the best sustainability slogans. They will be the ones with the best evidence.

In the indirect-emissions era, CBAM readiness means being able to prove electricity consumption, electricity origin, allocation logic and low-carbon claims with engineering-grade documentation.

For exporters, this is a warning. Weak metering may become expensive.

For renewable developers, this is an opportunity. A renewable PPA that can reduce CBAM exposure is more valuable than a generic green contract.

For EU importers, this is a due-diligence requirement. Supplier declarations need technical review before they become CBAM declarations.

For industrial plants, this is the practical conclusion:

CBAM readiness now starts at the meter.