Calculation Methodology
We believe in full transparency. Here is exactly how our calculators work, what data sources we use, and what assumptions we make.
1. Core CBAM Cost Formula
Certificates = Quantity × max(0, Emission Factor − Free-Allocation Share × EU Benchmark)CBAM Cost = Certificates × (EU ETS Price − Origin Carbon Price)Under the definitive regime (from 2026), importers do not pay for all embedded emissions. The obligation is reduced by a benchmark-based free-allocation adjustment, so certificates are due only for emissions above the EU benchmark, plus the share of the benchmark that is no longer allocated for free. The calculation depends on:
- Import Quantity — the mass of goods imported, measured in tonnes (or MWh for electricity).
- Emission Factor — the embedded CO₂ emissions per tonne of product. This can be the EU default value (with markup) or the actual verified emission data from your supplier.
- EU Benchmark & Free-Allocation Share — the EU ETS product benchmark and the free allocation still in force (97.5% in 2026, falling to 0% by 2034). Together these set the per-tonne deduction. See Section 4 below.
- CBAM Certificate Price — the official price published by the European Commission. In 2026 this is a quarterlyaverage of EU ETS auction clearing prices (Q1 2026 = €75.36); from 2027 it becomes a weekly price.
2. Free-Allocation Adjustment & Benchmarks
As EU ETS free allowances for CBAM sectors are phased out (2026–2034), the number of CBAM certificates an importer must surrender is reduced to mirror the free allocation that an equivalent EU producer still receives. The deduction is based on the EU ETS / CBAM product benchmark — not on the import's own emissions.
Free-Allocation Deduction (per tonne) = (1 − CBAM Factor) × Benchmark| Year | CBAM Factor (obligation) | Free Allocation Remaining |
|---|---|---|
| 2026 | 2.5% | 97.5% |
| 2027 | 5% | 95% |
| 2028 | 10% | 90% |
| 2029 | 22.5% | 77.5% |
| 2030 | 48.5% | 51.5% |
| 2031–2033 | 61% → 86% | 39% → 14% |
| 2034 onward | 100% | 0% |
Benchmark values are the route-representative figures from Commission Implementing Regulation (EU) 2025/2620 (e.g. ~1.37 tCO₂/t for BF/BOF steel, ~1.42 for unwrought aluminium, ~0.67 for grey cement clinker). The official annex sets more granular values per goods category and production route, and applies a higher benchmark where default emission values are used. Legal basis: Art. 31 Regulation (EU) 2023/956 + IR (EU) 2025/2620.
3. Default Emission Values
When importers do not provide verified supplier-specific emission data, the EU requires use of default emission values. These are set deliberately high — typically based on the worst-performing 10% of installations in the exporting country — to incentivize collection of real data.
Important: A markup penalty is applied on top of default values. The schedule is:
- • 2026: +10% markup
- • 2027: +20% markup
- • 2028 onwards: +30% markup
Legal basis: Article 7(2) and Annex IV of Regulation (EU) 2023/956. Default values are published by the European Commission in implementing acts.
4. Origin Country Carbon Price Deduction
If the country of origin has an explicit carbon price (carbon tax or ETS), the amount already paid is deducted from the CBAM liability. This avoids double taxation.
Net CBAM = (Certificates × EU ETS Price) − (Certificates × Origin Carbon Price)| Country | Carbon Price (€/tCO₂) | Deductible |
|---|---|---|
| China | ~€8 | Yes |
| South Korea | ~€15 | Yes |
| South Africa | ~€9 | Yes |
| Turkey | ~€5 | Yes |
| Japan | ~€3 | Yes |
| India, Russia, US, Brazil, etc. | €0 | No |
Carbon prices are approximate and updated periodically. Actual deductions require documentary proof (Art. 9 Regulation (EU) 2023/956).
5. Data Sources & Updates
CBAM Certificate Price
The official price published by the European Commission. In 2026 it is set quarterly (four fixed dates: 7 Apr, 6 Jul, 5 Oct 2026, 4 Jan 2027); from 2027 it becomes weekly. The "last updated" date and period are shown on every page that displays the price.
Default Emission Values
Sourced from EU Commission implementing regulations and the CBAM transitional registry guidance documents. Values are updated when new implementing acts are published.
HS Codes
Annex I of Regulation (EU) 2023/956, as amended. Our database covers all CBAM-relevant Combined Nomenclature (CN) codes.
Country Carbon Prices
Based on World Bank Carbon Pricing Dashboard and country-specific ETS registry data. Approximate values; actual deductions require documentation.
6. Limitations & Assumptions
- ⚠️We apply the latest published official CBAM certificate price (quarterly in 2026, weekly from 2027), not a real-time market feed. A declarant's realised cost depends on the prices in force across the import year, so actual costs may differ.
- ⚠️Default emission values are simplified to product-category level. The EU assigns more granular values based on specific CN codes and production routes.
- ⚠️The free-allocation benchmarks we apply are route-representative, category-level figures. The official annex (IR (EU) 2025/2620) sets more granular benchmarks per production route and uses a higher benchmark for default-value cases, so your exact free-allocation deduction may differ.
- ⚠️This tool provides estimates only and is not a substitute for professional CBAM compliance advice. Always consult qualified advisors.