CBAM embedded-emissions estimator

Estimated CBAM Financial Obligation (Educational Sample)

Estimated CBAM cost (per tonne of product; excluding free allowances and carbon price already paid in the country of origin):

Important Notes:

Scope of Emissions Priced: For goods in the Iron and Steel and Aluminium sectors, current CBAM legislation (Regulation (EU) 2023/956) stipulates that the carbon price obligation is calculated based on "direct embedded emissions" only. While this tool calculates both direct and indirect Specific Embedded Emissions (SEE) to meet CBAM reporting requirements, indirect emissions for these sectors are currently not subject to the purchase of CBAM certificates. Therefore, the cost estimate above is based on the direct SEE only.

Determination of EUA Price: The European Commission calculates the weekly CBAM certificate price, which is the average of the closing prices of EU ETS allowances on the common auction platform for each trading day of the preceding week. For illustrative purposes, this tool uses a fixed reference price of €80.00 per tCO2e. This figure is for reference only. Actual costs will vary depending on fluctuations in the EU ETS market at the time of import and surrender. Users are strongly advised to consult the latest official weekly price published by the European Commission.

Full CBAM Formula: The final amount payable to EU authorities is determined by a more complex formula that takes into account EU free allowances and carbon costs already paid in the country of origin: (Total Embedded Emissions − Free Allowance Emissions) × CBAM Certificate Price − Carbon Price Paid in Third Country

Adjustment for Free Allowances: CBAM obligations should be reduced by the free allowances that an equivalent EU installation would receive. These free allowances will be phased down between 2026 and 2034. As allowances decrease, CBAM costs will increase. For example (CN code 7201 10 11 - non-alloy pig iron): If the EU product benchmark for this good is 1.089 tCO2e/t, and the free allocation ratio for the year is 97.5%, the deductible emissions would be: 1.089 × 97.5% = 1.062 tCO2e/t. You only need to pay for CBAM certificates for emissions exceeding this threshold. Benchmark values and free allowances for each CN code change from time to time. Users are strongly advised to consult official announcements published by the European Commission.

Carbon Price Paid in a Third Country: If an effective carbon price has already been paid on embedded emissions in the country of origin (e.g., a carbon tax or a carbon price under an emissions trading system), that amount may be deducted from the final CBAM liability. This deduction only applies to amounts that have been effectively paid and have not been refunded (e.g., through export subsidies).

* Note: To avoid misunderstanding, the CBAM cost estimate will not be included in the generated HTML/Excel files.