EU CBAM Explained: What Exporters in Emerging Markets Need to Know in 2026

Updated 2026-10-11.

Since 1 January 2026, EU importers of steel, aluminium, cement, fertilisers, hydrogen and electricity owe CBAM certificates on the emissions embedded in those goods. The importer pays, not the exporter, but the importer needs the producer's emissions data. Without it, default values with a mark-up of 10% in 2026 apply, which usually costs more.

At a glance

Item	Rule in 2026
Who pays	The EU importer, as an authorised CBAM declarant
Goods covered	Iron and steel, aluminium, cement, fertilisers, hydrogen, electricity
Small-importer exemption	50 tonnes net mass per importer per year (not electricity or hydrogen)
Certificate price, 2026	Quarterly average of EU ETS auctions: €75.36 (Q1), €75.28 (Q2), €82.32 (Q3)
Certificates on sale	From 1 February 2027
First annual declaration	By 30 September 2027, covering 2026 imports
Default value mark-up	10% (2026), 20% (2027), 30% (2028 on); 1% for fertilisers

What CBAM is, in one paragraph

The Carbon Border Adjustment Mechanism puts the same carbon price on imported goods that EU producers pay under the EU Emissions Trading System. Reporting-only CBAM ran from October 2023 to December 2025. The definitive period started on 1 January 2026: from now on, each tonne of embedded emissions in covered imports needs a CBAM certificate, after an adjustment for the free allowances EU producers still receive.

Who does what

EU importer (authorised CBAM declarant): registers in the CBAM Registry, buys and surrenders certificates, files the annual declaration. Importers that applied by 31 March 2026 may keep importing while their application is decided.
Non-EU producer (you): supplies installation-level emissions data per tonne of product, ideally verified by an accredited verifier, so the importer does not have to use default values.
Accredited verifier: checks actual emissions data. Default values need no verification.

How the cost is calculated

Certificates owed = embedded emissions − (EU product benchmark × share of free allocation still granted).

The share of free allocation still granted falls from 97.5% in 2026 to 51.5% in 2030 and 0% in 2034. Emissions above the EU benchmark are charged in full from the first year; only the benchmark portion is phased in. A carbon price already paid in a third country can reduce the certificates owed (CBAM Article 9).

Worked example

An Indian mill ships 1,000 tonnes of blast-furnace (BF-BOF) steel to an EU buyer in 2026.

Step	Value
Emission intensity (verified actual)	2.1 tCO2 per tonne
Embedded emissions	2,100 tCO2
Free-allocation adjustment (indicative benchmark 1.52 × 97.5%)	1,482 tCO2
Certificates owed	618
Cost at €82.32 per certificate	≈ €50,900 (≈ €51 per tonne)
Same shipment using a default value of 2.1 + 10% mark-up	≈ €68,200

The benchmark here is indicative; the official product benchmarks and default values decide the real figure. Run your own numbers in the CBAM cost calculator.

The 50-tonne threshold

An importer that brings in 50 tonnes or less of covered goods (iron and steel, aluminium, cement and fertilisers combined) in a calendar year is exempt. Once the threshold is crossed, CBAM applies to every tonne imported that year, including tonnes imported before it was crossed. Electricity and hydrogen importers are always covered. For an exporter, this means small trial orders to many small buyers may fall outside CBAM, while one large buyer will not.

What exporters should do now

Map your products to CN codes (for example Chapter 72 for most steel, 7601 for unwrought aluminium, 3102 for nitrogen fertilisers, 2804 10 00 for hydrogen).
Measure installation-level emissions per tonne for each product, using your fuel, power and process records.
Get the data verified before your buyer's first annual declaration (due 30 September 2027).
Agree with each buyer how emissions data will be shared and which reporting period it covers.
Compare your actual intensity with the default value: if yours is lower, verified data saves your buyer money and makes you a cheaper supplier.

Frequently asked questions

Do exporters pay CBAM directly?

No. The EU importer, as an authorised CBAM declarant, buys and surrenders the certificates. The exporter's role is to provide emissions data that keeps that cost down.

When does money actually change hands?

Certificates for 2026 imports go on sale on 1 February 2027 and must be surrendered with the annual declaration due by 30 September 2027. From 2027, declarants must also hold certificates covering at least 50% of the embedded emissions imported so far in the year at each quarter end.

What happens if my buyer has no emissions data from me?

The importer uses the EU default value for the product, plus a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028 (1% for fertilisers). Default values do not need verification, but they are set conservatively.

Are textiles, chemicals or auto parts covered?

Not under current law. Covered goods are iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. Some steel and aluminium screws, bolts and articles are covered (for example CN 7318 and 7326). A Commission proposal from December 2025 would add more downstream steel and aluminium products; it is not yet law.

Does India's carbon market reduce CBAM?

Only a carbon price effectively paid can be deducted, net of any rebate. India's Carbon Credit Trading Scheme sets intensity targets for obligated entities; whether any amount qualifies depends on what is actually paid and documented.

Which emissions count?

For cement and fertilisers, direct and indirect (electricity) emissions. For iron and steel, aluminium and hydrogen, direct emissions only.