CBAM

How to Calculate CBAM Cost: The Formula, With a Worked Example

CBAM cost = embedded emissions x certificate price x phase-in factor, minus any carbon price already paid. Here is the full calculation for 2026.

The CBAM cost formula is short. Applying it correctly is where importers get it wrong. Here is the full calculation for the EU Carbon Border Adjustment Mechanism (Regulation (EU) 2023/956), which entered its definitive, paying phase on 1 January 2026.

The formula

CBAM cost = embedded emissions (tCO2e) x certificate price (EUR/t) x phase-in factor - carbon price already paid

1. Embedded emissions

Quantity imported (tonnes) x emission factor (tCO2e per tonne of product). Use EU default values or verified actual emissions from your supplier. Actual data is almost always lower than the default, so it directly cuts your cost, if you can document it.

2. Certificate price

One CBAM certificate covers one tonne of CO2e. The price tracks the EU ETS weekly average and has hovered around EUR 75 per tonne in early 2026. You do not control this input, so model a range.

3. Phase-in factor

In 2026 you pay on only a fraction of embedded emissions (the phase-in mirrors the phase-out of free ETS allowances), and that fraction rises each year toward 100%. This is why 2026 invoices are small and 2030+ invoices are not.

4. Deduct carbon price already paid

Under Art. 9, a carbon price already paid in the country of origin (China ETS, UK ETS, and others) is deductible, with documentation.

Worked example: 1,000 t of hot-rolled steel from India

  • Embedded emissions: 1,000 t x ~2.1 tCO2e/t default = 2,100 tCO2e
  • Gross at EUR 75/t: 2,100 x 75 = EUR 157,500 (the full, later-year obligation)
  • 2026 phase-in (~2.5%): roughly EUR 3,940 payable now
  • Minus any verified origin carbon price

The gap between the 2026 figure and the full figure is your budgeting horizon.

Model your real numbers

-> Free CBAM Cost Calculator - pick product and origin, enter tonnage, and get the cost with current phase-in and emission factors applied.

-> CBAM cost for steel from China or from India

Source

Regulation (EU) 2023/956 (CBAM)

Last verified: 21 June 2026. Certificate prices move weekly; treat figures as illustrative.

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