EU CBAM Compliance Guide: 2026–2034 Phase-In Schedule, Default Values, and Tariff Calculations

The EU’s Carbon Border Adjustment Mechanism (CBAM) became a real cost on 1 January 2026. After a two-year reporting-only transition, importers of steel, aluminium, cement, fertilisers, hydrogen and electricity now accrue a carbon liability on every tonne of embedded emissions, payable through CBAM certificates priced at the EU ETS level. The first certificates go on sale on 1 February 2027, and the first annual declaration for 2026 imports is due on 30 September 2027.

This EU CBAM compliance guide for 2026 explains who must comply, how the 2026–2034 phase-in works, why default values now carry a penalty mark-up, and how to calculate certificate costs, with a worked example at €80–€90 per tonne. Prefer a quick visual summary? See the 11-slide CBAM web story, or run your own numbers in our CBAM Calculator.

• What CBAM is and why it exists
• From transition to definitive period
• Covered goods and emissions scope
• The 2026–2034 phase-in
• Actual emissions vs default values
• How to calculate CBAM costs
• Who must comply and key obligations
• What’s next: downstream extension
• Common compliance mistakes
• Exporter and importer checklist
• FAQs

What CBAM is and why it exists

EU producers in heavy industry pay for their emissions under the EU Emissions Trading System (EU ETS). Without a border measure, production could shift to countries with weaker carbon pricing, a risk known as carbon leakage. CBAM puts the same carbon price on the emissions embedded in certain imported goods, so an imported tonne of steel carries a comparable carbon cost to a tonne made in the EU.

CBAM was established by Regulation (EU) 2023/956 (EUR-Lex) and simplified in 2025 by Regulation (EU) 2025/2083. It is phased in at the same pace as the EU ETS phases out the free allowances that have so far shielded EU producers.

From transition to definitive period

The transitional period ran from October 2023 to the end of December 2025. Importers filed quarterly reports on embedded emissions but paid nothing. On 1 January 2026 the definitive period began, and three things changed:

• Authorisation: only authorised CBAM declarants may import CBAM goods above the annual threshold.
• Financial liability: embedded emissions in 2026 imports must be covered by certificates, bought from February 2027 at the 2026 quarterly prices.
• Annual declaration: quarterly reports are replaced by one annual declaration, due by 30 September of the following year, with verified emissions data where actual values are used.

Covered goods and emissions scope

CBAM covers six sectors, identified by Combined Nomenclature (CN) codes: iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. Some precursors and simple downstream steel and aluminium products, such as screws, bolts and tubes, are already included.

Emissions scope differs by sector. For iron and steel, aluminium and hydrogen, only direct emissions from production count. For cement and fertilisers, indirect emissions from the electricity consumed in production are also included. For imported electricity, the embedded emissions are those from generation.

For steelmakers, the production route dominates the result. A hydrogen-based direct reduction plant can embed a fraction of the emissions of a blast furnace route; our green steel H2-DRI guide compares the routes, and our clean hydrogen guide covers hydrogen emissions accounting.

The 2026–2034 phase-in schedule

CBAM does not price 100% of embedded emissions from day one. Because EU producers still receive some free ETS allowances, the CBAM obligation is reduced by a CBAM factor that mirrors the share of free allocation they keep (Climat.be):

• 2026: 97.5% (2.5% of benchmark-level emissions priced)
• 2027: 95%
• 2028: 90%
• 2029: 77.5%
• 2030: 51.5%
• 2031: 39%
• 2032: 26.5%
• 2033: 14%
• 2034: 0% (full price on all embedded emissions)

Two consequences matter for budgeting. First, costs ramp sharply after 2028: the priced share jumps from 10% in 2028 to 48.5% in 2030. Second, the adjustment is based on EU benchmark values, not on your own emissions. Any embedded emissions above the benchmark are priced in full from 2026, so high-emission producers feel CBAM earlier than the headline 2.5% suggests.

Actual emissions vs default values: the mark-up penalty

Importers can declare either actual embedded emissions, calculated by the producing installation and checked by an accredited verifier, or the Commission’s default values. Default values are not benchmarks: they are conservative country-level emissions intensities used when actual data is unavailable.

In the definitive period, default values carry a deliberate mark-up to reward real data: 10% in 2026, 20% in 2027 and 30% from 2028 for cement, iron and steel, aluminium and hydrogen, and a flat 1% for fertilisers. For a high-volume importer, switching from defaults to verified actual data is often the single biggest lever on CBAM cost, and a strong selling point for low-carbon exporters.

How to calculate CBAM certificate costs

The official 2026 prices are €75.36 for Q1, €75.28 for Q2 and €82.32 for Q3 (European Commission). The example below uses €80 and €90 per tonne to bracket likely prices.

In this illustration, a shipment that costs €50,800 in 2026 at €80 would cost €102,320 in 2030 and €160,000 in 2034 at the same price, a 3.1× increase driven purely by the phase-out of free allocation. Cutting the emissions intensity from 2.0 to 1.4 t/t would remove the above-benchmark portion entirely in 2026. Run your own goods and intensities in our CBAM Calculator.

Who must comply and key obligations

• EU importers and indirect customs representatives of CBAM goods must hold authorised CBAM declarant status, unless they import 50 tonnes or less per calendar year (hydrogen and electricity excluded from this exemption).
• Quarterly holding: from 2027, declarants must hold certificates covering at least 50% of the embedded emissions of goods imported so far that year at each quarter end.
• Annual declaration: by 30 September for the previous year’s imports, reporting quantities, embedded emissions, verification and any carbon price paid abroad.
• Non-EU exporters have no direct obligation but must supply their EU customers with installation-level emissions data. Exporters without reliable data risk being replaced by suppliers who can prove lower emissions. A GHG Protocol inventory built with our GHG Emissions Engine is a useful starting point.

What’s next: the downstream extension

In December 2025 the Commission proposed (COM(2025) 989) extending CBAM from 1 January 2028 to around 180 steel- and aluminium-intensive downstream products, with new anti-circumvention measures. Parliament adopted its negotiating position at its September 2026 plenary; as of October 2026 talks with the Council continue and no final text has been agreed (European Parliament Think Tank). Manufacturers of machinery, vehicles and components should monitor it closely.

Common CBAM compliance mistakes

• Budgeting only for the headline 2.5%. The CBAM factor only reduces emissions up to the EU benchmark. Emissions above the benchmark are priced in full, so a carbon-intensive supplier can cost many times more than the 2026 percentage suggests.
• Treating the 50-tonne threshold as per shipment. It is a cumulative annual quantity per importer, across all CBAM goods except hydrogen and electricity. Several small consignments can add up quickly.
• Defaulting to default values. With mark-ups rising to 30% from 2028, relying on Commission defaults locks in avoidable cost. Start supplier data requests early, because installation-level data and verification take months.
• Forgetting the cash-flow gap. 2026 imports create a liability that is paid in 2027. From 2027, the 50% quarterly holding rule means certificates must be bought during the year, not only at declaration time.
• Losing evidence of carbon prices paid abroad. Deductions require proof that a carbon price was effectively paid in the country of origin and not rebated. Keep invoices, tax assessments and the producer’s declaration.

Most of these mistakes come from treating CBAM as a customs formality rather than a carbon-accounting obligation. The same installation-level emissions data that lowers CBAM cost also supports Scope 3 reporting for EU buyers and product carbon footprints for customers, so the investment pays off more than once.

Checklist for EU importers and non-EU exporters

1. Map your CN codes against the CBAM annex and confirm whether your annual imports exceed 50 tonnes.
2. Secure authorised declarant status before importing above the threshold.
3. Collect installation data: request verified actual emissions from suppliers rather than relying on marked-up defaults.
4. Budget for 2026 imports now: apply the quarterly prices and the 97.5% factor, and set aside cash for purchases from February 2027.
5. Model 2028–2034: the priced share rises from 10% to 100%; build it into supplier contracts and pricing.
6. Document carbon prices paid abroad so they can be deducted.
7. Link to disclosure: CBAM cost is a financial-materiality input under the CSRD; see our CSRD double materiality guide.

Carbon pricing is spreading beyond the EU: Singapore’s carbon tax rose to S$45 per tonne in 2026; see our Singapore carbon tax guide.

Frequently asked questions

When does CBAM start charging importers?

The financial obligation applies to goods imported from 1 January 2026. Importers buy CBAM certificates from 1 February 2027 and surrender them with their first annual declaration by 30 September 2027.

Which goods are covered by CBAM?

Iron and steel, aluminium, cement, fertilisers, hydrogen and electricity, identified by CN code. A Commission proposal would add about 180 downstream steel and aluminium products from 2028.

How much does a CBAM certificate cost?

In 2026 the price is the quarterly average of EU ETS auction prices: 75.36 euros for Q1, 75.28 euros for Q2 and 82.32 euros for Q3. From 2027 the Commission publishes weekly prices.

Are small importers exempt?

Importers bringing in 50 tonnes or less of CBAM goods per calendar year are exempt. The threshold does not apply to hydrogen or electricity.

What happens if I use default values instead of actual emissions?

Default values for most goods include a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028 (1% for fertilisers), so they usually cost more than verified actual emissions data.

Sources

• Regulation (EU) 2023/956 establishing CBAM, EUR-Lex
• European Commission, Price of CBAM certificates (2026 quarterly prices)
• European Commission, CBAM communication and news (50-tonne threshold, definitive regime)
• Climat.be (Belgian federal climate service), Gradual CBAM phase-in
• European Parliament Think Tank, Extension of CBAM scope to downstream goods and anti-circumvention
• Regulation (EU) 2025/2083 amending Regulation (EU) 2023/956 (simplification); Commission rules on default values and mark-ups.

This guide is for information only and is not legal, customs or tax advice. Confirm requirements with your national CBAM competent authority.