The Carbon Border Adjustment Mechanism CBAM

FERTILISERS SECTOR
Lecture by : Ambassador Mostafa Sherbiny
European Climate Pact Ambassador in Egypt 2022
Head of the Scientific Chair for Carbon Footprint and Sustainability at
ALECSO - League of Arab States
Focal Point and observer for UNFCCC Member of the Capacity Building
Committee at the UNFCCC and a member of the Civil Society
Commission at the World Health Organization at the United Nations
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The Carbon Border Adjustment Mechanism (CBAM)

Webinar session on the fertilisers sector

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Starting time: 9.00 pm

3 January, 2024
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Housekeeping rules

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Webinar Agenda

❶ CBAM general overview

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

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Carbon Border Adjustment Mechanism

❶ CBAM general overview

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The aim of CBAM

Prevents carbon leakage to

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

Contributes to decarbonisation
globally and to reaching
climate neutrality by 2050
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Reporting obligations in the transitional phase

October 2023 – December 2025

CBAM report containing the following: No verification of emissions by

▪ Total quantity of goods imported during the EU-accredited verifier
preceding quarter
▪ Total embedded direct and indirect emissions
▪ The carbon price due in the country of origin
for the embedded emissions

Report to be submitted quarterly No CBAM certificates

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CBAM emissions during the transitional phase

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

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

Upstream Company production Downstream

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 Comparison of product environmental footprint, product carbon footprint, and the specific partial carbon footprint
that is to be used for determining embedded emissions in the CBAM.
 Parameter ISO 14064-1 GHG EU ETS CBAM
(Annex B) protocol
“Direct emissions” Category 1 Scope 1 Subject to system boundaries of each EU Direct emissions are defined as “Emissions
(stationary) ETS installation from the production processes of goods
including emissions from the production of
heating and cooling consumed during the
production processes, regardless of the
location of the production of the heating
and cooling”

“Direct emissions” (mobile, e.g. forklift, cars) Outside the scope Outside the scope

Parameter ISO 14064-1 GHG EU ETS CBAM

(Annex B) protocol
“Indirect emissions”
(upstream)
of heating/cooling imported Category 2 Scope 2 Covered if produced in an EU ETS Included under “direct emissions”
installation
of electricity imported Covered if produced in an EU ETS Indirect emissions are defined as
installation “Emissions from the production of
electricity, which is consumed during the
production processes of goods, regardless
of the location of the production of the
consumed electricity”
of fuels imported Category 3 Scope 3 Outside the scope Outside the scope
Transport Outside the scope Outside the scope
of (precursor) materials imported Category 4 Covered if produced in an EU ETS To the extent precursors are defined as
installation relevant in the implementing act

“Indirect emissions” (downstream and other, Category 5 Outside the scope Outside the scope
e.g. use of product, endof-life emissions)
Example of an installation with basic monitoring concepts
for direct emissions

Emissions

Installation boundaries
Emission
point:
Source streams Stack Measurement
point: CEMS

Natural gas
Emission source 1
Boiler
Fuel oil
Product
Steam Condensate

Dryer
Raw material 1
( no emissions )

Source streams
Emission source 2
Coal ( Output from
Rotary kiln
mass balance)
Raw material 2
Slag

… Measurement instruments
 Schematic description of system boundaries relevant for the attribution of
emissions to a production process (please see main text for more information).
Principle of production process accounting

64
Source: Umweltbundesamt/European Commission
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Carbon Border Adjustment Mechanism

❷ Determination of embedded emissions:

Fertilisers

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Key Terms

Simple goods Complex goods Aggregated goods category

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

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CBAM goods in the fertilisers sector

Aggregated Product
goods category CN Code Description

Nitric acid 2808 00 00 Nitric acid; sulphonitric acids

Urea 3102 10 Urea, whether or not in aqueous solution
Ammonia 2814 Ammonia, anhydrous or in aqueous solution

2834 21 00 Nitrates of potassium

3102
Mineral or chemical fertilizers, nitrogenous, except: urea
Mixed fertilizers except 3102 10
Mineral or chemical fertilizers containing two or three of the fertilising
3105 elements nitrogen, phosphorus, and potassium; other fertilizers, except:
except 3105 60 00 mineral or chemical fertilisers containing the two fertilising elements
phosphorus and potassium
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Steps to determine specific embedded emissions

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

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

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

Step 4. Add the specific embedded emissions of relevant precursors

Step 5. Determine the specific embedded emissions of CBAM goods

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Step 1: Define the system boundaries

Mixed fertilisers example

Urea
CN: 3102 10
Purchased
precursors CO2
Ammonia (anhydrous)
CN: 2814
Phosphoric acid Drum granulation with NPK 15-15-15
Sulphuric acid integrated pipe reactor CN: 3105 20 10

Single super phosphate

Potassium chloride (KCI)
Natural gas
Production process 1
Electricity

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Step 2: Monitoring – General

Direct emissions from fuels and materials Electricity produced, if relevant

• Standard method, mass balance,
continuous emissions monitoring

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

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

Waste gases, if relevant Precursors, if relevant

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

❶ ❷
Calculation-based methodology Measurement-based methodology

Standard method Mass balance Continuous emissions

monitoring system
• determine quantities of fuels and • determine carbon content in all
input materials consumed fuels and input materials • measure GHG concentration
directly in the stack or using
• determine calculation factors such • determine carbon content in all extractive procedures (needed for
as net calorific value and emission output materials N2O)
factor • determine emissions as difference • measure flue gas flow
• determine emissions by between inputs and outputs
multiplying consumption with • determine emissions
• typically relevant where carbon
calculation factors remains in the goods produced
(e.g. steel).

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Step 2: Monitoring – Other methods

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

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

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

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

complex goods (includes the use of default values)

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Step 3: Attribution of direct emissions

Emissions related Emissions

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

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

Directly attributable Emissions related to Correction for

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

Attributed indirect Emission Emission factor of electricity

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

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 For simple goods
(Step 5):

using precursors as
input (Steps 4 and 5):
𝑺𝑬𝑬𝒈 =
𝑺𝑬𝑬 𝒈 =

Specific embedded emissions (director indirect)

For complex goods 𝑨𝒕𝒕𝒓𝑬𝒎𝒈

𝑨𝑳𝒈

Specific embedded
emissions
(direct or indirect)
+ ෍
Steps 4 & 5: Precursors and calculation of specific embedded emissions

𝑨𝒕𝒕𝒓𝑬𝒎𝒈
𝑨𝑳𝒈

𝒊=𝟏
𝒎 𝒊 · 𝑺𝑬𝑬𝒊

Amount of
Attributed emissions
(direct or indirect)

Amount of goods produced

Specific embedded
emissions (direct or
indirect) of the precursors

precursors used per

goods produced
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Worked example for the fertilizer sector

The following worked example shows how specific embedded emissions are
derived for a particular mixed fertilizer grade, NPK 15-15-15, produced by mixing
and granulation.
The resulting embedded emissions of imports into the EU are then calculated at
the end of the example for reporting in the transitional period.
Figure 7-12 gives an outline view of the installation and shows the system
boundaries as a hatched line for the single production process. The physical units
carrying out the production process have been grouped under ‘Granulation with
Pipe reactor’ (including an assumed dryer using natural gas) and the inputs and
outputs and sources of emissions have been identified.
Fertilizer example – Overview and complete monitoring approach for the production
of a mixed fertilizer grade.
Purchased precursors

Urea
CN : 3102 10

Ammonia
CO 2
(anhydrous )
CN : 2814

Phosphoric Acid Drum granulation NPK 15 -15 -15

with Pipe reactor CN : 3105 20 10
Sulphuric Acid

SSP*

KCl
Natural gas
Production process 1

Electricity
*SSP: Single Super Phosphate
calculation of total direct and indirect specific embedded emissions for
NPK mixed fertilizer.
Inputs Input mass Precursor embedded Embedded emissions (t
emissions (t CO2/t) CO2/t)
(kg / t) direct indirect direct indirect
KCl 251,3 n.a. n.a. n.a. n.a.
SSP 17% P2O5 200,0 n.a. n.a. n.a. n.a.
Phosphoric acid (40% P2O5) 300,0 n.a. n.a. n.a. n.a.
Sulphuric acid (96 wt-%) 116,0 n.a. n.a. n.a. n.a.
NH3 93,0 1,900 0,208 0,177 0,019
Urea 160,0 0,719 0,178 0,115 0,028
Energy needed for granulation 0,018 0,006
(average of reporting period)
Total SEE for mixed fertilizer 0,310 0,054
product NPK 15-15-15
Details of the calculation approach

Urea direct embedded emissions: 0,160 t / t x 0,719 t CO2 / t = 0,115 t CO2 / t mixed fertilizer product.
Urea indirect embedded emissions: 0,160 t / t x 0,178 t CO2 / t = 0,028 t CO2 / t mixed fertilizer
product.
Direct and indirect emissions arising from the mixing and granulation production process must also be
included, as is done in Table 7-19 above per tonne of product.
Other chemical raw material inputs (KCl, SSP, Phosphoric and Sulphuric acids) do not have embedded
emissions and do not need to be taken into account.
Using the above approach, the CBAM reporting obligation due for the import of mixed fertilizer product
into the EU during the transitional period may then be determined; for example, for the import of 100
tonnes of NPK 15-15-15 product:
Transitional period (report only):
o Direct embedded emissions = 100 t x 0,310 t CO2 / t = 31 t CO2 o Indirect embedded emissions =
100 t x 0,054 t CO2 / t = 5,4 t CO2
Total: 36,4 t CO2
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Worked fertilisers example (1/3)

Mixed fertilisers example: System boundaries, inputs, outputs and emissions

Urea
CN: 3102 10
Purchased
precursors CO2
Ammonia (anhydrous)
CN: 2814
Phosphoric acid Drum granulation with NPK 15-15-15
Sulphuric acid integrated pipe reactor CN: 3105 20 10

Single super phosphate

Potassium chloride (KCI)
Natural gas
Production process 1
Electricity

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Worked fertilisers example (2/3)

Installation’s direct and indirect emission intensity

Direct emissions Consumption (t) Emissions (t CO2)

Natural gas (NCV = 48 GJ/t, EF = 56,1 t CO2/TJ) 668 1 800
Indirect emissions Consumption (MWh) Emissions (t CO2)
Electricity (EF = 0,833 t CO2/MWh) 720 600
Activity level Production (t)
NPK fertiliser (15-15-15) 100 000
Emission intensity Direct emission Indirect emission
intensity (t CO2/t) intensity (t CO2/t)
Emission intensity 0,018 0,006

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Worked fertilisers example (3/3)

Example calculation of total direct and indirect specific embedded emissions for NPK mixed fertiliser

Inputs Input mass Precursor embedded Embedded emissions

emissions (t CO2/t) (t CO2/t)
(kg / t) direct indirect direct indirect
Urea 160 0,719 0,178 0,115 0,028
Ammonia 93 1,900 0,208 0,177 0,019
Phosphoric acid (40% P2O5) 300 NA NA NA NA
Sulphuric acid (96 wt-%) 116 NA NA NA NA
Single super phosphate (17% P2O5) 200 NA NA NA NA
Potassium chloride (KCl) 251 NA NA NA NA
Energy needed for granulation NA NA NA 0,018 0,006
Total SEE for mixed fertiliser product
0,310 0,054
NPK 15-15-15 (N–P2O5–K2O)

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Carbon Border Adjustment Mechanism

❸ Overview of CBAM actors &

reporting declarants

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Overview of the actors in CBAM

Customs
authorities

Information on CBAM obligations

Import data
Customs declarations

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

Request for additional information or Conclusions

submission of report
Checks

National
Assessment of Indicative
competent
information assessment
authorities

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Who are the reporting declarants?

Rules for Representatives

No representation by others -
Own import
Importer is the Subject to
reporting declarant
Direct customs representative
(Status: Customs Declarant)
reporting

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

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Steps to comply with the CBAM reporting obligations

Step 1: Define the scope of goods concerned

Step 2: Determine the reporting period to use

Step 3: Identify all the parameters you need to report

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

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Carbon Border Adjustment Mechanism

❹ Submitting CBAM reports

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Reporting in the CBAM Transitional Registry

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

Operators National
of Competent
installations Authorities OUTSIDE THE REGISTRY

VIA THE REGISTRY

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The CBAM Transitional Registry

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Timeline for reporting declarants

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

*After the modification deadline, reporting declarants may request reopening of the file
before the national competent authority for eventual corrections.
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The Carbon Border Adjustment Mechanism - Fertilisers Sector

Thank you!