- 14 variables determine the CBAM bill. Volume, carbon intensity, EU ETS price and the year's factor.
- 2Declining free allocation. The more your product exceeds the European benchmark, the more you pay.
- 3The bill surges after 2029. From 2.5% in 2026 to 100% in 2034, through steep stages.
- 4Three levers reduce the bill. Actual data, low-carbon sourcing and upstream supplier decarbonisation.
The Carbon Border Adjustment Mechanism (CBAM) is a carbon price applied to the embedded emissions in your imports, aligned with the European market, the EU Emissions Trading System (EU ETS), rather than a flat-rate tax. Three variables determine the bill, while a fourth, the year, acts as a multiplier.
1How the CBAM charge is calculated
The official formula, as used by the Directorate-General for Energy and Climate (DGEC) calculator, is based on four elements:
- The quantity imported, in tonnes of product.
- The product's carbon intensity (tCO2 per tonne), from your actual data or, failing that, the CBAM default values published by the Commission, increased by a mark-up of 10 to 30% depending on the year.
- The carbon price, linked to EU ETS allowance prices: a quarterly average for 2026 imports, then a weekly average from 2027 (around €80 per tonne in early 2026, but volatile).
- The year's CBAM factor, meaning the remaining free allocation share (97.5% in 2026, none in 2034): the share of emissions charged is the remaining percentage, 2.5% in 2026 and up to 100% in 2034.
In practice, the charge deducts a reference free allocation, based on the benchmark of an efficient European producer, which decreases each year. The more carbon-intensive your product is compared with this benchmark, the more you pay. In 2034, free allocation disappears: you pay on all imported emissions.
CBAM charges the gap between the carbon in an imported product and that of an efficient European producer, a gap payable at 100% in 2034.
2Three worked examples
At a carbon price of €80 per tonne, here is the approximate annual extra cost by sector and year. The intensities used are the DGEC calculator's benchmarks.
Estimate your CBAM additional cost
Choose your sector, tonnage and carbon price per tonne. The tool applies the CBAM factor for each year. An indicative estimate, rather than a quotation: your actual cost depends on your production route and verified data.
Intensity used: 2.15 tCO2e / tonne
Estimated annual additional cost, to compare with your margin on these volumes. The EUA price is volatile and the CBAM factor trajectory is set until 2034. A firm costing requires your actual emissions data for each installation.
- Steel (5,000 t/year, 2.15 tCO2/t): around €21,500 in 2026, close to €417,000 in 2030 and up to €860,000 in 2034.
- Primary aluminium (2,000 t/year, 1.59 tCO2/t): around €6,400 in 2026, rising to €123,000 in 2030 and €254,000 in 2034.
- Cement / clinker (20,000 t/year, 0.69 tCO2/t): around €27,600 in 2026, reaching €535,000 in 2030 and more than €1.1 million in 2034.
These amounts are indicative: your actual cost depends on your production route and verified data. The calculator below allows you to test your own assumptions.
3Why the bill rises sharply after 2029
The charged share does not rise linearly. It remains moderate until 2029 (22.5%), then almost doubles within a year to reach 48.5% in 2030, before rising towards 100% in 2034. In practice, an import costing €21,000 in charges in 2026 will cost twenty times more in 2030. This step change should inform decisions on investment or changing suppliers.
As the EU ETS price per tonne is also expected to rise over the decade, the effect is cumulative: more tonnes charged at a higher unit price.
4How to reduce the bill
Three levers, in increasing order of effectiveness:
- Provide your actual data rather than default values: if your product is less carbon-intensive than average, you avoid the punitive mark-up and pay on your actual intensity.
- Change supplier or production route: electric arc furnace steel (scrap) is much less carbon-intensive than blast furnace steel, and therefore incurs much lower charges.
- Decarbonise at source: for a producer, this is the only structural response, also protecting export competitiveness, which CBAM does not cover.
5Key takeaways
- CBAM charges the carbon gap. The more carbon-intensive your import is compared with the European benchmark, the more you pay.
- The bill rises in stages, reaching 100% in 2034. Currently at 2.5%, it reaches 48.5% in 2030, then rises sharply at the end of the free allocation phase.
- Actual data reduce the bill. Default values are increased by 10 to 30%. Measurements at suppliers change the bill immediately.
- Plan sourcing in advance. Decarbonising suppliers or sourcing closer to Europe provides lasting protection against the 2030-2034 increase.
CBAM costs are managed upstream. The first step is to calculate your actual exposure rather than pay the default value penalty. The second is to include carbon in purchasing decisions from 2026, because a sourcing decision made today pays off in 2030.
