The UK CBAM will apply to both the indirect and direct emissions embodied in CBAM goods, including those emissions embodied in any relevant precursor goods at a point further up the value chain. In order to identify the right emissions for calculating these, the UK proposed to define those emissions as follows:

• Direct emissions are emissions related to the production processes of CBAM goods. This includes (but is not limited to) emissions from the production of heating and cooling consumed during the production processes, irrespective of whether the heating or cooling was produced on or off site.
• Indirect emissions are emissions related to the production of electricity, which is consumed during the production of CBAM goods irrespective of whether the electricity was produced on or off site.

Source: GOV.UK

• Why is the UK introducing Carbon Border Adjustment Mechanism (CBAM)?
• Which sectors will a UK CBAM initially apply to?
• Commodity codes within scope of UK CBAM?
• Can product scope of UK CBAM be extended?