CBAM for ferronickel, ferrochrome and ferromanganese: a CBAM good and a precursor at once.

Ferro-alloys sit in CN heading 7202, inside the iron and steel sector of Annex I to Regulation (EU) 2023/956. Only three families are in scope:

Other ferro-alloys are outside CBAM: ferro-silicon, ferro-silico-manganese, ferro-silico-chromium, ferro-molybdenum, ferro-tungsten and ferro-silico-tungsten among them. Nickel pig iron with more than 10% nickel is treated as ferro-nickel production; below 10% it falls under pig iron.

Point 3.12 of Annex I to the Methodology Act defines the boundary for FeMn, FeCr and FeNi production. Direct emissions cover:

• CO₂ from all fuel inputs, whether used for energy or as reducing agent, such as coke charged to the furnace;
• CO₂ from process inputs such as limestone, and from flue gas cleaning;
• CO₂ from the consumption of electrodes or electrode paste;
• carbon remaining in the alloy, the slag or wastes, handled with a mass balance.

The Commission’s iron and steel guidance lists the steps inside the boundary: raw material handling and pre-treatment (pellets and sinter for FeMn and FeCr; calcination and pre-reduction in a rotary kiln for FeNi), the electric arc furnace itself, decarburisation and secondary metallurgy where needed, casting, crushing and granulation, and emissions control.

The Methodology Act specifies no precursors for ferro-alloy production itself; the Commission’s guidance adds sintered ore, where it is used. Going downstream, ferro-alloys are a precursor of nearly every steel category:

• Pig iron and DRI, together with hydrogen, sintered ore and other pig iron or DRI;
• Crude steel (CN 7206, 7207, 7218, 7224), from basic oxygen or electric arc furnaces, together with pig iron, DRI and bought-in crude steel;
• Iron or steel products, together with crude steel and other iron or steel products.

A steelmaker that wants to use actual data for the ferro-alloy it melts must take it from a verification report issued by an accredited verifier and covering the year the alloy was produced. Without it, the steelmaker uses the default value for the alloy’s country of production with the mark-up, or the Annex IV value if the country is unknown. Defaults and actual data can be mixed batch by batch, and the split is reported in the operator’s emissions report.

Whether the buyer is an EU importer or a steelmaker using the alloy as a precursor, the request comes down to the same verified figures for each production process and reporting year:

• the installation and the production process, with the CN code of each alloy and the tonnes produced;
• specific direct embedded emissions in tCO₂e per tonne, with indirect emissions marked as not applicable;
• the embedded emissions of sintered ore, if bought in and used;
• the specific embedded free allocation for the alloy, which the declarant deducts before buying certificates;
• any carbon price effectively paid in the country of production, if a deduction is claimed;
• the operator’s emissions report in the Commission template and the verifier’s report for that year.