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Deduction of carbon prices paid under CBAM
In May 2026, the EU Commission published an important building block on CBAM still missing until then. In the draft implementing act, detailed rules were laid down for the first time on how carbon prices already paid in the supply chain outside the EU can be taken into account and reduce CBAM costs for importers.
Why the new draft is important
The draft dated 13 May 2026 is considered a central building block for the practical implementation of the CBAM from 2026 onwards and could have a significant impact on international supply chains, carbon markets and the competitiveness of export-oriented industries. The EU Commission is collecting feedback on the proposed rules until 10 June 2026.
CBAM basically pursues a simple goal: imported goods should be subject to the same carbon costs as products from the EU that are already regulated under the EU Emissions Trading System (EU ETS). This is intended to prevent so-called “carbon leakage” – i.e. the relocation of emission-intensive production to countries with weaker climate regulations. Sectors such as steel, aluminium, cement, fertilisers, hydrogen and electricity are initially affected. Until now, it was provided by law that carbon costs already paid in the country of origin could be offset against CBAM certificates. However, no concrete calculation rules were in place. It is precisely this gap that the EU Commission’s draft now closes. The draft defines:
- which foreign carbon pricing systems are recognised,
- how companies have to prove payments,
- how emission allowances are treated on the voluntary market (carbon credits),
- which upper limits apply,
- and how default values can be used.
The new rules are to apply retroactively from 1 January 2026. Companies must therefore prepare for new compliance requirements now.
Which carbon pricing systems are recognised
The EU does not take a country-by-country approach. Instead of officially recognising systems of individual states, the draft defines general criteria for permissible carbon pricing mechanisms. In particular, carbon prices paid can be recognised as:
- Emissions Trading Systems (ETS),
- Direct carbon taxes,
- CO₂ taxes on fuels,
- and hybrid systems with multiple compliance options.
The decisive factor here is that the systems must be mandatory and actually incur costs for the embedded emissions of a product. Voluntary climate protection measures or purely voluntary carbon credit purchases are generally not deductible.
The EU is aiming to avoid double burdens without weakening the integrity of the EU ETS. An importer should therefore only have to bear the difference between the third country carbon price already paid and the carbon price under the EU ETS.
Two calculation methods for deductions of carbon prices
Particularly relevant is the introduction of two different calculation paths:
- Default carbon prices
If companies use standard values to calculate embedded emissions, only standard carbon prices published by the EU of the respective third country may be taken into account. These standard values are updated annually by the EU Commission. This approach reduces the administrative burden for producers and importers, but is often likely to be less accurate.
- Actual verified carbon prices
Alternatively, companies can claim actual carbon costs. However, verified evidence must be provided for this. Carbon prices must be determined at the installation level and for individual CBAM goods (according to CN codes). Only carbon costs actually paid for the embedded emissions of the imported product are recognised. Any refunds, compensations or free allocations within a carbon pricing system in the third country must be deducted from the carbon price paid. Especially for companies with complex supply chains, this is likely to mean considerable documentation and verification requirements.
In both cases, the operators in third countries must calculate the carbon prices actually paid per tonne of CBAM goods, then convert and aggregate them based on the annual average EURO exchange rate. The reduction in the number of CBAM certificates to be submitted by the CBAM declarant is calculated by dividing the effective carbon price paid per tonne by the annual reference price of CBAM certificates and multiplying it by the quantity of imported goods.
Upon payment of an effective carbon price in the supply chain of 10 EUR/t for a specific CBAM good and an assumed reference price of CBAM certificates of 80 EUR/t, the number of CBAM certificates to be submitted is thus reduced by 0.125 per tonne of imported good.
A Key Debate: Voluntary Markets and Article 6 of the Paris Agreement
The treatment of international carbon credits under Article 6 of the Paris Agreement is particularly controversial. For the first time, the new draft explicitly allows the partial recognition of such carbon credits within the framework of CBAM. In concrete terms, however, only ITMOs (Internationally Transferred Mitigation Outcomes) should be able to be taken into account if they meet the requirements of Article 6.2 or 6.4 of the Paris Agreement. Here, too, the draft sets strict limits:
- Carbon credits must be part of the compliance options of the third country’s carbon pricing mechanism; purely voluntary use does not allow any deductions
- A maximum of 10% of reported emissions under a carbon price may be covered by international Article 6 credits, and credits used above this limit are assigned a value of zero
- Carbon credits under avoidance projects from the country of production itself can be credited without further qualitative or quantitative criteria. International carbon credits must be officially authorised and recorded via the UNFCCC Centralised Accounting & Reporting Platform (CARP) register
- There must be no significant audit objections in the verification by an independent third person
The EU Commission is thus pursuing several goals at the same time (Table 1).
Table 1: Objective for the crediting of carbon prices in a third country under CBAM
| Avoiding greenwashing | Protecting environmental integrity
|
Promoting true decarbonisation |
| The EU wants to prevent companies from “buying their way out” of real emission reductions through cheap international certificates. | In the voluntary market, there are considerable differences in the quality of carbon credits. Discussions about fraud and questionable climate projects have weakened confidence in parts of the market. | The EU wants to encourage companies to actually reduce emissions in their production processes instead of primarily buying offsets. |
The debate is politically highly sensitive. The European Parliament’s Environment Committee (ENVI) had recently even described the inclusion of Article 6 credits as “too early and counterproductive”. The Commission is now pursuing a middle course: limited recognition instead of complete exclusion.
Practical challenges for companies
For importers and producers, the new rules create considerable operational requirements. Figure 1 illustrates the main challenges. In practice, many companies are still at the beginning of implementing internal processes.
Figure 1: Challenges in accounting for carbon prices paid in the supply chain (source: carboneer)
The situation is particularly complex for precursors and indirect emissions. Here, the draft partially allows the use of default values to limit the bureaucratic effort.
Conclusion and international implications
The draft has far-reaching geopolitical significance. Many countries are now developing their own carbon pricing systems to reduce greenhouse gas emissions and to spare their exporters disadvantages on the EU market. As a result, CBAM is increasingly becoming a global standard for carbon pricing. Countries without resilient carbon pricing systems could suffer competitive disadvantages when exporting to the EU in the future. At the same time, the recognition of high-quality Article 6 credits could strengthen the international carbon markets. Export-oriented economies in Asia, the Middle East and Latin America in particular are therefore watching the new rules very closely.
With the new draft on the crediting of carbon prices already paid, the EU is now concretising one of the most important pending building blocks of the CBAM regime. The draft creates more clarity for companies, but at the same time significantly increases regulatory complexity.
Particularly relevant is the cautious opening to international Article 6 credits. The EU is thus signalling that global and voluntary carbon markets could play a role in the CBAM system in the future – but only under strict quality and transparency requirements.
For companies, this means one thing above all: Anyone who wants to continue to export competitively to the EU from 2026 onwards must provide verified CBAM emissions data, transparent evidence of carbon costs and functioning compliance processes. CBAM is thus increasingly evolving from a pure climate instrument to a central factor in international trade and industrial strategy.
Verification under CBAM – Key learnings and guidance for effective preparation (Part 2)
Using actual CBAM data can substantially reduce CBAM‑related costs for importers. However, essential data points—such as direct specific embedded emissions or specific embedded free allocation—must be available in verified form to be eligible for use in a CBAM declaration.
In this series (find part 1 here) we cover the key processes and requirements for verification under CBAM along with our experiences in preparing CBAM declarants, suppliers and non-EU producers. This second part provides guidance on how operators of installation can prepare for verification under CBAM.
Preparation for verification: Requirements
During the transitional period of the CBAM implementation (2023-2025), operators of installations in third countries were able to provide CBAM data to their EU-based customers through the official CBAM communication template for installations (the EU Commission is currently working on an updated version), the O3CI-portal of the CBAM registry (verification reports will only be issued here) or other means such as the carboneer developed EFDA template. While all such documentation of calculated CBAM data is considered an emissions report under the CBAM framework, it only represents the final output of a complete CBAM data monitoring, collection and calculation processe.
From the start of the definitive period of CBAM on 1 January 2026, any CBAM data for the calendar year 2026 intended for verification must be substantiated. Operators thus require a structured and compliant approach to data monitoring and calculation (see Figure 1), including:
- Developing a monitoring plan and implementing the described methods and procedures in accordance with the monitoring and calculation rules in Implementing Regulation 2025/2547,
- Preparing an emissions report incorporating relevant data from precursor suppliers and the operator’s own production processes, resulting in the final calculated CBAM data,
- Compiling documentation and evidence supporting reported information from internal and/or external sources.
Figure 1: Components of a CBAM-compliant system for data collection and calculation for verified CBAM data (source: carboneer)
The missing foundation: the monitoring plan
Without a monitoring plan that describes and documents the systems and methods for generating CBAM relevant data at the installation level, verification cannot take place. Such monitoring system must conform to the new calculation rules under Implementing Regulations 2025/2547, 2025/2620 (free allocation adjustment) and 2025/2621 (default emissions values). Specifically, the monitoring plan must be prepared in English and include among other elements:
- Description and diagram of the installation defining production processes, products and the system boundary,
- List and description of emissions sources and activity data, calculation rules and precursors information,
- Description of data management, control procedures and quality systems that ensure reliable and accurate CBAM data.
According to current information from the EU Commission, no official monitoring plan template will be provided. Instead, operators of installations in third countries must therefore design and implement installation-specific monitoring plans and systems themselves. At carboneer, we have developed a monitoring plan template aligned with the up-to-date CBAM calculation rules and requirements to support our work with producers of CBAM goods worldwide (see excerpts in Figure 2).
Figure 2: Excerpts of the carboneer CBAM monitoring plan template (source: carboneer)
CBAM preparedness: Insights from practical experience
Working on CBAM data calculation over the past years, we have repeatedly observed that many producers are insufficiently prepared for the regulatory and methodological complexity of CBAM‑specific rules. The increased use of the CBAM communication template or carboneer’s EFDA template has improved the availability of basic emissions and activity data. However, the plausibility and internal consistency of that data often remain weak or even dubious. Common issues include:
- Fragmented data sets
- Inconsistent or incompatible units
- Unexplained changes over time and wrong monitoring periods
- Missing or incomplete underlying monitoring systems
While forthcoming EU guidance documents and webinars may clarify certain aspects and expectations, they will not replace the need for producers to establish robust inhouse monitoring systems to become “verification ready”.
A fundamental challenge is that many producers still lack formal CBAM monitoring plans and documented data‑collection procedures, which are essential prerequisites for any meaningful third‑party verification. In absence of clear descriptions of system boundaries, allocation rules, and data sources, verifiers cannot reliably assess whether reported values are complete and accurate. Such shortcomings might result in negative verification statement or a prolonged verification process with potential implications for availability of verified data for the CBAM declaration deadline on 30 September 2027.
Beyond structural issues, we frequently notice that producers either do not calculate all required CBAM data points under the new CBAM calculation rules or are lulled into complacency by relying on outsourcing crucial CBAM-related tasks. Critical data points such as specific embedded free allocations (SEFA) are often missing, misinterpreted, or calculated using inconsistent assumptions. Likewise, many operators lack actual CBAM‑compliant data from their precursor suppliers and therefore depend on default factors or rough estimates. These gaps can result in financial risk and reputational exposure, as EU importers rely on this information in their commercial decision-making already now.
Turning CBAM data into competitive advantage: Step-by-step guidance
During support for importers and producers, our projects on CBAM verification preparation typically follow a structured sequence of phases (see Figure 3):
- CBAM gap assessment: Identification of methodological weaknesses, data gaps, and potential risk analysis
- Development of monitoring plan: Establishing a systematic and installation-specific approach to data collection
- CBAM data calculation: Implementation of the monitoring plan, collection of primary data, and calculation of embedded emissions and embedded free allocations
- Workshops and trainings for staff: Building long-term CBAM capacity within the organisation to ensure inhouse data collection, calculation and verification readiness
Figure 3: Step-by-step project structure for CBAM verification preparation by carboneer (source: carboneer)
Through early identification of data gaps, streamlined data collection, and implementation of scalable processes, suppliers and importers can thus ensure that their processes are aligned with CBAM methodology and verification standards.
Preparing for CBAM verification during 2026 will be crucial for importers and producers — particularly where commercial viability of products may be at risks if importers are forced to revert to high default values.
Verification under CBAM – Key learnings and guidance for effective preparation (Part 1)
Using actual CBAM data can substantially reduce CBAM‑related costs for importers. However, essential data points—such as direct specific embedded emissions or specific embedded free allocation—must be available in verified form to be eligible for use in a CBAM declaration.
In this series we cover the key processes and requirements for verification under CBAM along with our experiences in preparing CBAM declarants, suppliers and non-EU producers. This first part focuses on the commercial importance of verified data as well as the accreditation and verification processes.
Commercial value: Verified CBAM data vs. Defaults
From 2026 onward, all CBAM-covered imports are subject to payment obligations. Costs however remain uncertain, not only because CBAM certificate prices for remaining quarters in 2026 will only be finally known ex-post, but because many importers lack clarity on availability and plausibility of actual CBAM emissions data from suppliers.
The key risk: If suppliers cannot provide verified CBAM emissions data by 30 September 2027, importers must report using default values, which are typically significantly higher. This may dramatically increase reported emissions and lead to major cost increases — potentially adding hundreds of euros per tonne — making imports economically unviable (see our article here). Figure 1 provides an overview of CBAM costs for imports of tubes and pipes from different countries in line with the default emissions values.
Figure 1: CBAM cost per tonne of tubes and pipes CN 7306 6199, based on carboneer model CBAMCC. Modelling assumptions: Import during Q1 2026, CBAM certificate price 75 €, default values, no CO2 prices paid in supply chain (source: carboneer).
Verified CBAM data therefore offers major commercial value, particularly for imports from countries facing punitive default values. Access to verified data can potentially reduce CBAM costs down to zero, safeguarding the competitiveness of both non‑EU suppliers and importers.
A key challenge arises from the split responsibilities: Emissions occur and data is generated at the supplier level, while the financial obligation to purchase CBAM certificates lies with the importer. This raises important questions about cost allocation — for example, whether cost increases should be borne by the supplier or the declarant, especially where suppliers already provide non‑verified actual data that allow for cost estimates. Possible approaches include:
- Supplier‑led hedging strategies allowing to offer products including CBAM costs
- Supplier contracts with defined markups or rebates depending on availability and final verified data
However, the availability of actual CBAM data in verified form is constrained by strict and complex calculation rules and verification requirements as laid out in the CBAM regulation and relevant implementing and delegated acts. During our work with importers and non-EU producers of CBAM goods we are confronted with recurring questions and misunderstandings regarding CBAM data calculations and verification. This series aims to clarify some of those topics and shed light on the relevant processes.
Potential bottleneck: Accreditation for CBAM verification
Verification bodies may only provide verification under CBAM if accredited by a National Accreditation Body (NAB) of an EU member state. As of today, no verification body has been officially accredited. NABs are expected to open CBAM accreditation schemes until May 2026 (the DAkkS as the German NAB already opened the application process) , with a tentative timeline for the first accreditations issued by late 2026. Accredited verification bodies will gain access to the CBAM Registry from September 2026 Accreditation as detailed in Delegated Regulation (EU) 2025/2551 is thus often a multi-month process designed to ensure verifiers’ ability and expertise of the specific rules on CBAM data monitoring and calculation (e.g. embedded emissions and embedded free allocations).
Several internationally operating verification bodies are already accredited under the European Emission Trading System (EU ETS) and will likely be the first official verifiers accredited for the CBAM scope as well. Verification bodies that seek accreditation under CBAM do not have to be EU-based but can also be located in third countries. To date, only 6 out of 21 NABs have confirmed that they will open their accreditation processes to applicants based in third countries (compare overview in Table 1).
Table 1: List of National Accreditation Bodies for CBAM verifiers in the EU
In our work, we frequently encounter “certification” or “verification” statements on CBAM data by third parties which at closer scrutiny do not hold up to the CBAM data calculation rules or conform to the CBAM verification standards. Four main bottlenecks may impede importers from using actual verified data in their CBAM declaration due 30 September 2027:
- Limited availability of accredited verification bodies and auditors
- Short verification period (Jan-Sep 2027)
- Verification requirements throughout the value chain
- Moderate level of producer preparedness
Timely preparation for verification by non-EU producers of CBAM goods already during 2026 is crucial to mitigate these risks, increase confidence in CBAM data and thus reduce prospective costs for CBAM declarants.
A complex and lengthy process: How CBAM verification works
CBAM data such as embedded emissions or embedded free allocation must be verified for each monitoring period, i.e. every calendar year, before an importer may use it in their annual CBAM declaration (see Figure 2). Verification must be performed by accredited CBAM verifiers in line with the principles in Implementing Regulation (EU) 2025/2546, using a risk‑based approach similar to the EU ETS.
Figure 2: The annual verification process (source: carboneer)
A key feature of the process are mandatory site visits as part of the verification activities: For the first year of the definitive phase in 2026, a physical on‑site visit to each installation producing CBAM goods is mandatory. From 2027 onwards, verifiers may, under defined low‑risk conditions and where no significant changes have occurred, replace a physical visit with a virtual visit or waive it entirely, but a physical site visit must still take place at least once every two years.
In practice, the verification process might take three months for well‑prepared operators but can take considerably longer in case the operator’s preparation is insufficient. The process follows several structured stages (see Figure 3): initial risk analysis and kick‑off, detailed verification planning and document request, audit and site visit with data testing and interviews, followed by processing, clarification of findings and adjustments, internal quality assurance on the verifier side, and finally issuance of the verification statement and standardised verification report in the CBAM Registry.
Figure 3: Indicative timeline and details of a CBAM verification process (source: carboneer)
As accredited verifiers are expected to be officially announced only in late 2026, non-EU producers currently should use the time to prepare for the verification process — or even conduct pre-verification activities — during 2026.
In the second part of this series, we will provide practical guidance on how producers can prepare efficiently for CBAM verification.
Reducing CBAM costs through verification
Importers of CBAM goods are currently struggling with great uncertainty. Do they have to use the high default values for grey emissions when submitting their CBAM declaration for import in 2026 or are their suppliers able to provide actual verified CBAM data? The cost implication of the two options can differ greatly.
High uncertainties for importers
While CBAM goods could be imported before 1 January 2026 without an obligation to pay, all imports have been subject to a payment obligation since the start of 2026 (see our article regarding the start of the definitive CBAM phase). However, many importers are not yet clear how high the payment for the grey emissions will be. On the one hand, the reason for the unclarity is that CBAM certificate prices for imports during 2026 will only be determined at the end of each quarter.
However, the second and often more critical reason is that if suppliers do not know if their suppliers can provide verified real data for embodied emissions and CBAM benchmarks (specific free allocation) by 30.09.2027 (2026 CBAM declaration deadline for imports). If they cannot, the importer must use default values for reporting. The default values for grey emissions are very high for some countries and products and may double or triple product prices.
The value of verified actual data
Such an increase in costs is not feasible for many companies, which in turn could bring the import of these goods to a standstill or result in high margin reductions for importers. As an example, Figure 1 shows the difference in CBAM costs for importing steel pipes from India, once with verified data and once with the assumption of default values.
Figure 1: Example of CBAM costs using verified data vs. default values (Source: carboneer)
In this case, the cost difference between verified real values and standard values would amount to almost 240,000 EUR. An importer of these products would therefore have to pay CBAM costs of EUR 323 per tonne of imported product using the standard values. With a product price without CBAM of EUR 800-1200 per tonne, the additional CBAM costs are therefore very significant.
For the strategic and economic evaluation of suppliers, goods and products, affected companies should evaluate and compare different suppliers and their products in scenario analyses (see Figure 2 with an excerpt from carboneer’s CBAMCC model).
Figure 2: Scenario analysis for the strategic evaluation of CBAM (Source: CBAMCC carboneer)
Without appropriate assessment and preparation, the CBAM declaration and the obligation to surrender CBAM certificates in 2027 could be a nasty surprise for importers.
Preparation for verification
However, in order to be able to use actual data from suppliers, this data must be available in verified form. Only independent verifiers, accredited by the national accreditation bodies of EU member states, are allowed to determine the authenticity of data under CBAM. Furthermore, suppliers must prepare extensively for verification, as the inspection bodies themselves are not allowed to provide support for the collection or calculation of CBAM data.
It is expected that the first accredited verifiers will not be known until earliest mid-2026. The final verification will also not be completed before the beginning of 2027, as the production data from 2026 will only be available by the start of the new year. Figure 3 shows the data flow from producer to importer.
Figure 3: The annual verification process (Source: carboneer)
In addition to a mandatory inspection of the supplier’s facility by the auditor, producers of CBAM goods must also submit a monitoring plan that describes in detail the methodologies for measuring, calculating and collecting a large number of relevant data points. Without such a plan, no verification of the data can take place.
As of 1 January 2026, the rules for CBAM emission calculation have also changed and other data points, such as the CBAM benchmarks, are necessary to successfully pass a verification. In our experience, only a few producers and suppliers can fully comply with the current CBAM rules. The high number of production sites worldwide as well as potential capacity limitations at the verifiers makes verification without sufficient preparation in many cases unlikely. Without verified actual data, CBAM costs for importers could increase dramatically.
In our experience, structured support can prepare suppliers for verification within a few weeks. Especially if the potential cost savings for the importer would mean tens to hundreds of thousands of euros, direct supplier support is currently one of the most promising ways to limit CBAM costs and gain competitive advantage.
We will dive into further ways to reduce or secure CBAM costs, especially with regard to the management of CBAM certificates, in upcoming articles and webinars.
CBAM enters the definitive period: key regulatory updates and scope extension
Following two years of a transitional reporting-only phase that began in October 2023, the EU Carbon Border Adjustment Mechanisms (CBAM) will move into its definitive period on 1 January 2026, when financial obligations will start to apply. In December 2025, the European Commission released a comprehensive package of implementing and delegated acts to operationalise this shift, alongside a legislative proposal to significantly expand CBAM’s scope and strengthen its anti-circumvention framework. Together, these developments confirm CBAM’s as a central pillar of the EU’s climate and industrial policy.
Stay informed and join us during the carboneer webinar “Digesting the latest CBAM updates – Implications for stakeholders” on 8 January 2026.
Current status and the start of the definitive period in 2026
During the transitional phase, importers of covered goods had to report embedded emissions on a quarterly basis without purchasing CBAM certificates. This phase ends on 31 December 2025. From 1 January 2026, CBAM enters its definitive period, triggering the obligation for authorised CBAM declarants (imports above the mass threshold of currently 50 tonnes of CBAM goods per year) to surrender CBAM certificates corresponding to the embedded emissions of imported goods, adjusted for free allocation under the EU Emissions Trading System (EU ETS). The first surrender deadline will be the 30 September 2027 for imports during the year 2026.
The financial application of CBAM will be phased in gradually, mirroring the progressive phase-out of free allocation under the EU ETS through 2034. This alignment is intended to ensure a level playing field between EU producers and third-country suppliers, while maintaining the environmental integrity of the EU’s climate framework.
Publication of final legislation for the definitive CBAM period
On 17 December 2025 – just two weeks before the start of the definitive period – the European Commission published a package of adopted draft implementing and delegated acts designed to make CBAM fully operational. These documents provide long-awaited legal and technical clarity for importers, producers, verifiers, and national authorities for the start of the definitive CBAM period. While first provided on a provisional basis, most of the documents are already officially adopted through publication in the Official Journal of the European Union (compare Table 1).
Table 1: Published legal acts for the CBAM definitive phase and proposals for further amendments of the CBAM
| Legislation | Content | Status |
| IR | Calculation rules for embedded emissions | in force |
| IR | Calculation of the free allocation adjustment to the number of CBAM certificates to be surrendered | in force |
| IR | Information communicated by customs authorities | in force |
| IR | Establishment of default values | in force |
| IR | Calculation and publication of the price of CBAM certificates | in force |
| IR | Principles for verification of declared embedded emissions | in force |
| DA | Specifying the conditions for granting accreditation to verifiers | in force |
| Regulation | Extension of its scope to downstream goods and anti-circumvention measures | Proposal |
| Regulation | Establishing the Temporary Decarbonisation Fund | Proposal |
| IR | Amending and correcting: authorised CBAM declarant | Amendment |
| IR | Amending and correcting: CBAM registry | Amendment |
| IR: Implementing Regulation, DA: Delegated Act | ||
In parallel, the Commission proposed an amendment to the CBAM regulation to extend CBAM to downstream products and to introduce additional anti-circumvention measures. Unlike the implementing framework, this proposal for scope extension must still go through the ordinary legislative procedure involving the European Council and the European Parliament.
Delegated and implementing acts: overview and main topics
The CBAM implementing framework consists of eight implementing acts and one delegated act, addressing most of the core operational elements of the mechanism.
The implementing act on emissions calculation methodology establishes harmonised rules for monitoring and calculating embedded emissions at installation level in non-EU countries. It aligns CBAM system boundaries with those of the EU ETS and allows a combination of actual and default values for different precursors.
The implementing act on free allocation adjustment defines how CBAM obligations are reduced to reflect the free allocation of allowances in the EU ETS. It introduces CBAM benchmarks per CN code under the scope of CBAM, with a differentiation between using actual verified and default emissions values (compare our analysis here). CBAM benchmarks per CBAM product can also differ based on the production route such as for natural gas-based direct-reduced iron (DRI), as well as electric arc furnace (EAF) produced steel. This aims to avoid zero-obligation outcomes that would undermine CBAM’s environmental objectives.
The implementing act on default values sets country- and CN-code-specific default emission values for the definitive period (compare our analysis here). For non-electricity goods, these include mark-ups to reflect potential underestimation of emissions. These mark-ups are phased in with highest values of +30% for most CBAM products from 2028 onwards. The default values will be reviewed regularly, with a first reassessment expected by December 2027.
The implementing act on CBAM certificate pricing specifies how CBAM certificate prices will be determined. From 2027 onwards, prices will mirror the weekly average EU ETS allowance price, while for 2026 imports, quarterly averages will apply. Prices will be published directly in the CBAM Registry.
Two acts address verification and accreditation (compare our analysis here). Verifiers must perform on-site inspections in the first year of reporting, i.e. 2026. There is limited flexibility for virtual visits thereafter, following a risk-based approach. Accreditation for verifiers is open to entities established both inside and outside the EU, provided they are accredited by EU accreditation bodies.
Additional implementing acts cover the authorised CBAM declarant status, the definitive CBAM Registry, and information exchange with customs authorities, collectively streamlining procedures, enhancing transparency, and strengthening enforcement.
The legal acts regarding the conditions for sales and repurchase of CBAM certificates and the rules regarding CO2-prices paid in the supply chain are still under development and expected in Q1 2026.
Low CBAM benchmarks and high default values: cost implications
A key practical implication of the new framework is the cost impact of relying on default values. CBAM benchmarks for free allocation adjustments are generally low, while default emission values – increased by the mark-ups – are relatively high. As a result, importers unable to provide verified actual emissions data may face significantly higher CBAM costs (compare example in Figure 1).
Figure 1: Estimated CBAM certificate costs for imports of 1200 tonnes of tubes and pipes from India using default values (blue) and actual values (green). (source: carboneer CBAMCC model)
This design incentivises third-country producers to establish robust monitoring, reporting, and verification systems and discourages the use of default values. Over time, companies that fail to transition to verified actual data risk sustained competitive disadvantages in the EU market.
CBAM scope extension: timing, products and CN codes
Beyond operational rules, the Commission has proposed a major expansion of CBAM’s scope to downstream goods, reflecting concerns that carbon leakage could shift further along the value chain. From 1 January 2028, CBAM would cover around 180 additional products – adding roughly 7500 new importers and transforming CBAM into a full-value-chain carbon instrument.
The proposed expansion targets steel- and aluminium-intensive goods, including iron and steel articles, fabricated metals, machinery and industrial equipment, vehicles and components, medical instruments, and metal furniture and buildings (compare Table 2). These products typically contain a high share of steel or aluminium and are at a high risk of carbon leakage. In value terms, they already account for over half of CBAM-relevant imports.
Table 2: Potential CBAM product scope extension according to EU Commission’s proposal
| Indicative CN Codes | Product Category | Examples of Products |
| 8407–8409 | Engines and Parts | Diesel engines, engine components |
| 8413–8419 | Pumps, Burners, Refrigeration, Heat Exchange | Pumps, burners, furnaces, refrigeration and freezing equipment, heat exchangers, cooling towers |
| 8420–8431 | Lifting, Conveying, Construction Machinery | Cranes, hoists, winches, conveyors, elevators, lifting systems, construction machinery components |
| 8479 | Industrial Machinery & Automation | Industrial robots, automated handling equipment, specialised industrial machines |
| 8501–8504 | Electrical Machinery | Electric motors, generators, transformers containing steel or aluminium |
| 8544 | Electrical Conductors | Electrical cables and conductors containing steel or aluminium |
| 8701–8708 | Vehicles and Vehicle Parts | Trucks (all drivetrains), vehicle chassis, bodies, gearboxes, wheels, axles, selected vehicle parts |
| Chapter 90 | Medical Instruments | Tube needles and gas analysis instruments |
| Chapter 94 | Metal Furniture & Structures | Seats with metal frames, office furniture, shelving, prefabricated buildings containing steel or aluminium |
The proposal also strengthens anti-circumvention rules by including pre-consumer steel and aluminium scrap as CBAM precursors, tightening controls on misdeclaration, and allowing the Commission to restrict the use of actual emissions values in high-risk scenarios.
Together, these updates confirm CBAM’s role as a cornerstone of the EU’s climate policy. The coming months, as well as the first reporting deadline on 30 September 2027 for imports during 2026, will show if and how the implementation of CBAM turns embedded emissions and emission intensity of materials and products into procurement-relevant factors. With obligations starting in 2026 and a significant scope extension on the horizon, CBAM is rapidly becoming a central compliance and cost factor for global industrial supply chains.
Download CBAM Default Values & Benchmarks in Spreadsheet Format
Complying with CBAM is challenging enough for everyone involved. Yet the recently published CBAM Default Values and Benchmarks are not available in a well‑formatted, machine‑readable structure. For project teams working among importers and producers of CBAM goods, this makes analysis slower, more time‑consuming, and unnecessarily frustrating.
The data is provided below in a more accessible spreadsheet format. Hopefully, this helps some teams navigate their CBAM work with greater ease and efficiency. carboneer accepts no liability for the accuracy, completeness or topicality of the data, nor for any consequences of its use.
CBAM Default Values and BenchmarksIf you’re also looking for an opportunity to have carboneer provide clarity on the latest CBAM updates, don’t forget to register for our upcoming webinar on January 8th. Register here:
Webinar: Digesting the latest CBAM updates – Implications for stakeholders.
Hope to see you there!