CBAM, the Carbon Border Adjustment Mechanism, is the EU charge on the carbon emitted to make imported cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, set by Regulation (EU) 2023/956. Since 1 January 2026 the EU importer owes CBAM certificates for those goods, one certificate per tonne of CO2 equivalent embedded in them.
So what does that cost? On 1,000 tonnes of hot-rolled steel coil from India, imported in 2026, it's €253,919. The same shipment imported in 2030 costs €365,786. Both figures are worked through below on the Commission's own default values and certificate price.
Why the EU introduced CBAM
CBAM exists to stop carbon leakage. EU producers of the same goods already pay for their emissions under the EU Emissions Trading System (ETS). Without a border charge, steel made with coal outside the EU would carry no carbon cost at all, and EU production would move to wherever carbon is free.
The price of a CBAM certificate follows the EU ETS auction price, so an importer pays roughly what an EU producer would have paid for the same tonne of CO2.
CBAM goods and CN codes in scope
CBAM covers 6 sectors, listed by CN code in Annex I of the regulation:
| Sector | CN codes in scope |
|---|---|
| Iron and steel | 479 |
| Aluminium | 58 |
| Fertilisers | 27 |
| Cement | 6 |
| Electricity | 1 |
| Hydrogen | 1 |
That's 572 8-digit codes of the 2026 Combined Nomenclature. Iron and steel carries most of the list because it includes downstream goods: screws, bolts, tubes, rails and steel structures are in scope, as well as the raw metal. The full list, with the default values for each code, is on the CBAM CN code list.
When CBAM starts, and who pays
CBAM's definitive regime started on 1 January 2026, after a reporting-only transitional period from October 2023 to the end of 2025. From that date:
- An importer that brings in more than 50 tonnes of CBAM goods in a calendar year must be an authorised CBAM declarant. Electricity and hydrogen have no threshold.
- The declarant files one annual CBAM declaration for the year's imports, and surrenders certificates for the embedded emissions, by 30 September of the following year. The first deadline is 30 September 2027, for goods imported in 2026.
- Certificates go on sale on a common central platform from 1 February 2027. No certificates are held during 2026.
- From 2027, a declarant must hold certificates for at least 50% of the embedded emissions of the year's imports at the end of each quarter.
These dates come from Regulation (EU) 2025/2083, the simplification that amended the CBAM regulation in October 2025. It brought in the 50 t threshold, moved the declaration from 31 May to 30 September, and cut the quarterly holding from 80% to 50%. Plenty of explainers still quote the old dates.
The obligation falls on the EU importer, not on the producer abroad. The producer outside the EU is still pulled in, though. Its buyer will ask for the actual emissions of its installation, because without them the buyer pays on default values, and those are set high on purpose. What that means for a supplier is in CBAM for exporters.
The CBAM cost formula
A CBAM bill is certificates times price, and the certificates come from 6 numbers:
- The mass, in tonnes.
- The embedded emissions per tonne: either actual verified data from the installation, or the default value the Commission publishes for that CN code and country of origin.
- The mark-up on a default value: 10% in 2026, 20% in 2027, 30% from 2028. Fertilisers carry 1% in every year.
- The CBAM benchmark: what the cleanest EU plants emit per tonne of the same goods, set in Implementing Regulation (EU) 2025/2620.
- The CBAM factor from Directive 2003/87/EC Art. 10a(1a): the share of that benchmark EU producers still get as free ETS allowances. It's 97.5% in 2026 and falls to 0% in 2034, so the importer gets the same deduction and loses it on the same timetable.
- The certificate price, which the Commission publishes from EU ETS auction prices.
Certificates = mass × emissions per tonne × (1 + mark-up), minus mass × CBAM factor × benchmark, rounded up. Cost = certificates × price. A carbon price already paid in the country of origin can be deducted.
Here's one real line: 1,000 tonnes of hot-rolled steel coil, CN 7208 39 00, from India, imported in 2026.
| Step | Value |
|---|---|
| Default value, India, CN 7208, route C | 4.28 tCO2e per tonne |
| With the 10% mark-up for 2026 | 4.708 tCO2e per tonne |
| Embedded emissions, 1,000 t | 4,708 tCO2e |
| CBAM benchmark, route C | 1.37 tCO2e per tonne |
| Adjustment, 1,000 × 97.5% × 1.37 | 1,335.75 tCO2e |
| Emissions subject to CBAM | 3,372.25 tCO2e |
| Certificates, rounded up | 3,373 |
| Price, Q2 2026 | €75.28 |
| Cost | €253,919.44 |
The step-by-step method, with more examples, is in how to calculate CBAM cost. The price itself, and how it's set each quarter, is in the CBAM certificate price.
The cost by import year
The same 1,000 tonnes from India costs €253,919 in 2026 and €365,786 in 2030. Hold the certificate price at €75.28 and change only the year:
| Import year | Mark-up | CBAM factor | Certificates | Cost |
|---|---|---|---|---|
| 2026 | 10% | 97.5% | 3,373 | €253,919 |
| 2027 | 20% | 95% | 3,835 | €288,699 |
| 2028 | 30% | 90% | 4,332 | €326,113 |
| 2030 | 30% | 51.5% | 4,859 | €365,786 |
The mark-up climbs and the factor falls, so less of the benchmark comes off each year. By 2030 the shipment costs 44% more than in 2026, before the carbon price moves at all, and from 2034 nothing comes off. Indian steel on defaults already pays for most of its emissions in 2026, because its default sits far above the benchmark. That's why buyers now ask suppliers for actual emissions data: a supplier whose verified value sits below the default saves its buyer money every year. The cost chart draws this curve for any CN code and up to 4 countries.
The cost by country of origin
Default values differ by country, so the same goods can cost 16 times as much from one origin as from another. The benchmark doesn't change with the origin, so the part of a default above it is paid in full. For 1,000 tonnes of CN 7208 39 00 imported in 2026:
| Origin | Default value with mark-up | Certificates | Cost |
|---|---|---|---|
| India | 4.708 | 3,373 | €253,919 |
| China | 3.506 | 2,170 | €163,358 |
| Ukraine | 2.731 | 1,396 | €105,091 |
| Türkiye | 2.671 | 1,336 | €100,574 |
| South Korea | 2.330 | 995 | €74,904 |
| United States | 1.540 | 205 | €15,432 |
The Commission publishes default values for 121 countries, plus a rest-of-world value for every other origin. They were replaced in full on 31 July 2026. What changed is in CBAM default values 2026.
FAQ
What is CBAM in simple terms?
It's a carbon price the EU charges at the border on imported steel, aluminium, cement, fertilisers, electricity and hydrogen. The importer buys certificates for the CO2 emitted to make the goods, so imports carry the same carbon cost as goods made inside the EU.
Is CBAM a tax?
It works like one, but it isn't a duty rate on the customs value. The importer buys and surrenders certificates, one per tonne of CO2 equivalent, priced from EU ETS auctions.
Does CBAM apply to companies outside the EU?
The legal obligation sits with the EU importer. A producer outside the EU doesn't file or pay, but its EU buyers will ask it for verified emissions data, since the alternative is paying on higher default values.
What happens if I import less than 50 tonnes a year?
Below 50 tonnes of CBAM goods in a calendar year, the obligation may not apply to you. The threshold doesn't cover electricity or hydrogen. The detail is in the 50-tonne threshold.
When is the first CBAM payment due?
Certificates for 2026 imports go on sale on 1 February 2027 and must be surrendered with the annual declaration by 30 September 2027. How to file it is in the CBAM declaration.
Your next steps as an importer
- Count your year's CBAM tonnage per importer entity. Below 50 t of the threshold goods, the obligation may not apply. See the 50-tonne threshold.
- Check your declarant status. Above 50 t, importing without authorisation is a breach.
- Price each of your lines on default values, then ask your largest suppliers for verified actual emissions where the default is high. The calculator prices one line in a few seconds.
- Budget the certificates for 2026 imports at the quarterly price: they're bought from February 2027 and surrendered by 30 September 2027.
Sources: Regulation (EU) 2023/956, as amended by Regulation (EU) 2025/2083. Default values from Regulation (EU) 2026/1740. Certificate price from the Commission's price page. CBAM benchmarks from Implementing Regulation (EU) 2025/2620, Annex. Figures recomputed on 19 October 2026 from the CBAM Data dataset.