CBAM default values systematically overstate embedded emissions for most non-EU producers, creating a financial penalty that grows from 10% in 2026 to 30% from 2028 onward under Implementing Regulation (EU) 2025/2621. A Turkish BF-BOF steel mill with an actual emission intensity of 1.5 tCO₂e per tonne pays its EU buyer an additional €42 per tonne in unnecessary certificate costs when its shipments are assessed against the default value of 2.1 tCO₂e per tonne at the current EU ETS price of approximately €70 per tCO₂. Exporters in six sectors, including steel, cement, aluminium, fertilizers, electricity, and hydrogen, face this gap between defaults and reality. Verified actual data eliminates the overpayment. This article explains how CBAM default values work, where the financial exposure falls, and how site-specific verification converts the penalty into a competitive advantage.
What CBAM Default Values Mean for Non-EU Exporters
CBAM default values are emission intensity figures published by the European Commission for use when an EU importer cannot obtain verified actual emissions data from the production installation. Under Article 7(7) of Regulation (EU) 2023/956 and the schedules set by IR (EU) 2025/2621, defaults are set at the country-average emission intensity for each product category, then marked up by a punitive percentage. The mark-up exists precisely to pressure exporters into providing actual data. The default value schedule is summarized in the table below.
| Year | Mark-up applied above calculated default | Applies to |
|---|---|---|
| 2026 | +10% | Steel, cement, aluminium, hydrogen |
| 2027 | +20% | Steel, cement, aluminium, hydrogen |
| 2028 onward | +30% | Steel, cement, aluminium, hydrogen |
| 2026 onward | +1% only | Fertilizers (agricultural price sensitivity) |
Non-EU manufacturers have no direct legal obligation under Regulation (EU) 2023/956. The certificate obligation falls on the EU importer, the authorized CBAM declarant. The commercial reality, however, is that the EU importer passes the extra cost back to the exporter through lower purchase prices or supplier substitution. Understanding the EU CBAM guide shows how this cost chain operates from the regulation's certificate surrender requirement through to exporter pricing.
The 2026 net obligation appears small, because 97.5% of EU ETS free allocation remains in place and the CBAM factor is only 2.5%. The same default penalty that costs €3.50 per tonne net in 2026 rises to €51.45 per tonne net by 2030, when the CBAM factor reaches 48.5%. Exporters who treat 2026 as a low-stakes year are underestimating the structural cost that compounds through 2034, when free allocation disappears entirely.
How Default Values Are Set and Why They Systematically Overprice Efficient Producers
Default values disadvantage efficient producers because they reflect country-wide production averages, not individual installation performance. A Turkish steel mill running a modern electric arc furnace (EAF) with a scrap rate above 85% may emit 0.4 tCO₂ per tonne of crude steel. The Turkish BF-BOF country default, drawn from national production statistics and marked up by 10%, exceeds 2.0 tCO₂e per tonne. The efficient EAF mill is penalized at a rate five times its actual emission intensity. Efficient producers lose most; high-carbon producers lose least. This inverse logic reverses only when actual verified data is provided.
The default value construction methodology starts with the weighted average emission intensity across all production installations in a given country and route, draws on national inventory data and sectoral statistics, then applies the mark-up. Two producers in the same country operating the same route face the same default, regardless of whether one has invested in energy recovery, scrap substitution, or process optimization. Actual emissions measurement breaks this forced averaging.
Verified actual specific embedded emissions, expressed in tonnes of CO₂e per tonne of goods, replace the default entirely. The EU importer then surrenders certificates based on the lower verified figure. The exporter's lower cost is reflected in commercial terms negotiated with the EU buyer.
Caption: For Turkish steel and cement, the gap between CBAM default values and verified actual embedded emissions creates a growing certificate cost disadvantage for exporters who do not measure.
The Worked Cost Comparison: BF-BOF Steel from Turkey
The financial gap between default values and verified actual data becomes concrete in a single mill-level example. A Turkish BF-BOF steel exporter ships hot-rolled coil (CN 7208) to an EU buyer. The buyer is an authorized CBAM declarant subject to Regulation (EU) 2023/956.
The two scenarios are compared below.
| Scenario | Specific embedded emissions (tCO₂e/t) | CBAM certificates required per tonne | Gross certificate cost @ €70 | Net cost in 2030 (48.5% CBAM factor) |
|---|---|---|---|---|
| Default value (with 10% mark-up, 2026) | 2.1 | 2.1 | €147 | ~€71.30 |
| Verified actual emissions (this mill) | 1.5 | 1.5 | €105 | ~€50.93 |
| Saving from verification | 0.6 tCO₂e/t | 0.6 fewer certificates | €42/t gross | ~€20.37/t net in 2030 |
At 2026 net costs (2.5% CBAM factor), the saving is €1.05 per tonne, which appears negligible. At 2030 net costs (48.5% CBAM factor), the same verified data saves the EU buyer €20.37 per tonne on every tonne imported. For a Turkish steel mill exporting 200,000 tonnes per year to EU buyers, 2030 net savings from verification reach approximately €4.07 million annually. The verification cost, a third-party accredited verifier fee of €5,000 to €50,000 per installation per period, pays back within the first shipment by 2030.
The calculation uses the current EU ETS price of approximately €70 per tCO₂ (Q1 2026 range: €66 to €90). ETS price forecasts from analysts covering the Fit for 55 cap trajectory project €100 to €150 per tCO₂ by 2030, which would increase the per-tonne saving proportionally.
This same logic applies to the CBAM default values framework as it affects EU importers: the importer who receives verified data from the exporter pays fewer certificates and holds a commercial advantage over importers relying on defaults.
Which Sectors Face the Largest Default Value Gaps
Four sectors carry the most significant default-to-actual gaps. The table below shows the typical delta between country-specific CBAM default values and actual emission intensities for the largest exporting countries to the EU.
| Product | Country | CBAM default (tCO₂e/t) | Typical actual (tCO₂e/t) | Gap | Net saving @ €70 × 48.5% (2030) |
|---|---|---|---|---|---|
| Steel slab (BF-BOF) | China | 3.167 | ~1.8 to 2.1 | ~1.0 to 1.4 | €34 to €48/t |
| Portland cement | Turkey | ~1.584 | ~0.88 | ~0.70 | ~€24/t |
| Ammonia | Egypt | ~3.5 (est.) | ~1.8 to 2.2 | ~1.3 to 1.7 | €44 to €58/t |
| Primary aluminium | UAE | ~2.5 (est.) | ~1.5 to 2.0 | ~0.5 to 1.0 | €17 to €34/t |
Turkish cement producers face one of the most acute situations. Portland cement from Turkish kilns averages approximately 0.88 tCO₂ per tonne of actual emissions. The CBAM default for Turkish Portland cement is approximately 1.584 tCO₂e per tonne, an 80% gap between actual and assessed. At €70 per tCO₂ and the full CBAM factor applied in 2034, the default-based cost reaches approximately €110 per tonne gross, against an FOB export price frequently in the range of €60 to €80 per tonne. Cement producers who do not provide verified data cannot price competitively into EU markets by 2030.
Fertilizers are the exception. The mark-up for fertilizers is only 1% above the calculated default, compared to 10% to 30% for other sectors. This concession responds to agricultural food security concerns. For urea and ammonium nitrate producers in Egypt, Algeria, and Trinidad and Tobago, the financial incentive to measure is lower than for steel or cement, though the baseline emission intensity (approximately 2.3 to 2.6 tCO₂e per tonne for urea) still generates significant absolute certificate costs.
How Exporters Provide Verified Actual Emissions Data
Exporting producers submit actual emissions data through the CBAM Operators Portal, the European Commission's dedicated system for non-EU installation operators. The portal accepts the Communication Template, which maps installation-level energy flows, production volumes, and emission calculations to the required CBAM fields. Data uploaded to the portal can be shared with all EU buyers simultaneously. One upload, prepared once per reporting period, serves all importer relationships.
The 3 steps required before verified data replaces a default value are listed below.
- Prepare a monitoring plan documenting how embedded emissions are measured at the installation, defining system boundaries, identifying all emission sources, and specifying the calculation methodology in accordance with IR (EU) 2025/2547.
- Collect activity data for the reporting period: fuel consumption records, electricity invoices, raw material inputs, and production volumes, all at the installation level.
- Engage an accredited third-party verifier. The verifier must be accredited under EN ISO/IEC 14065 by a national accreditation body recognized by European Accreditation (EA). A physical site visit to the production installation is mandatory for the first verification period.
The verifier issues a verification report confirming whether the declared specific embedded emissions give a true and fair view of actual production-phase emissions. This report accompanies the data submission to the EU importer and satisfies the evidentiary requirement under Regulation (EU) 2023/956.
Verifier registration with EU member state competent authorities opens September 1, 2026. Third-country verifiers can be accredited by a local national accreditation body that holds a mutual recognition agreement with EA. This means Turkish, Indian, and Chinese accreditation bodies can certify local verifiers to conduct site visits without requiring EU-based verifiers to travel to every installation.
When Do CBAM Default Values Become a Competitive Threat?
CBAM default values become a competitive threat at the point where the EU buyer can source equivalent goods from a supplier who provides verified data at a lower assessed emission intensity. The timing varies by sector and buyer behavior, but three structural triggers make 2027 and 2028 the critical window for most exporters.
- February 2027: Certificate purchases begin, converting the abstract obligation into real cash outflows for EU importers. Buyers immediately identify which suppliers reduce their certificate cost.
- 2028: The default mark-up rises from 20% to 30%, widening the gap between verified and unverified suppliers by a further 10 percentage points.
- 2028 to 2030: The CBAM factor accelerates from 10% to 48.5% of embedded emissions, multiplying the absolute cost difference between exporters with verified data and those relying on defaults.
Exporters who begin monitoring and verification in 2026 have data ready for the first CBAM declaration deadline of September 30, 2027, covering calendar year 2026 imports. Exporters who delay until 2027 miss the first declaration cycle and hand their EU buyers a full year of default-based costs.
The competitive logic extends beyond certificate costs. EU importers operating under margin pressure from rising ETS prices preferentially contract with suppliers who can demonstrate low verified emissions, because lower embedded emissions translate directly to fewer certificates surrendered per tonne. A verified emission intensity of 1.5 tCO₂e per tonne versus a default of 2.1 tCO₂e per tonne is a commercial differentiator, not only a compliance technicality.
Caption: The CBAM default value mark-up and the CBAM factor both increase through 2034, compounding the cost disadvantage for exporters without verified actual emissions data.
What Happens When the EU Importer Uses Default Values Instead of Verified Data
EU importers who receive no data from the exporter use CBAM default values automatically. The importer surrenders CBAM certificates based on the default specific embedded emissions multiplied by the imported quantity. The additional certificate cost above what verified actual emissions would have required is a pure commercial loss distributed across the supply chain.
The distribution of that loss depends on market power. Four outcomes are possible for EU importers relying on default values, and each has a mirror consequence for the exporter.
- The importer absorbs the additional certificate cost through margin compression. Margin pressure then motivates the importer to find a lower-cost alternative supplier.
- The importer passes the additional cost to the exporter as a lower purchase price. The exporter's net return per tonne falls by the default mark-up amount.
- The importer passes the additional cost to the EU end customer through higher prices. This reduces volume demand over time.
- The importer switches to a supplier in a country with lower default values or a supplier who provides verified actual data.
Each outcome except margin absorption harms the exporter directly or indirectly. The exporters most at risk are those in high-default countries such as China (steel slab default of 3.167 tCO₂e per tonne) and Turkey (cement default of approximately 1.584 tCO₂e per tonne) where the gap to actual emissions is largest and where competitor suppliers from lower-default countries can undercut on assessed CBAM cost even if physical production costs are equivalent.
How Verified Data Interacts with the Full CBAM Obligations Chain
Does Providing Verified Data Make the Exporter Legally Liable Under CBAM?
No. Providing verified actual emissions data to an EU importer does not make the non-EU exporter legally liable under Regulation (EU) 2023/956. The obligation to purchase and surrender CBAM certificates rests entirely on the authorized CBAM declarant, the EU-based importer. The exporter's role is to supply accurate installation-level data. The exporter has no certificate account, no registry access, and no surrender obligation. Legal liability for incorrect data, if any, is a matter of contract law between the exporter and the EU importer, not of CBAM regulation enforcement.
Can an Exporter Claim Credit for a Carbon Price Already Paid at Home?
Yes, but only through the EU importer's declaration, not directly. Under Article 9 of Regulation (EU) 2023/956, the authorized CBAM declarant can deduct the carbon price effectively paid in the country of production from the CBAM certificate obligation. The exporter must document the carbon pricing scheme, the amount paid per tonne CO₂e, and any free allocations or rebates received. South Korea's K-ETS, currently subject to Commission assessment for Article 9 recognition, is the most commercially significant example. Voluntary offsets, internal carbon prices, and subsidies do not qualify for Article 9 deduction.
Are Default Values Ever Better Than Verified Actual Data?
In 2026 specifically, the note in the master fact sheet is relevant: due to the interaction between how the free allocation adjustment is calculated and the benchmarks used in default construction, CBAM liability under default values can in isolated cases be lower than under actual values. This reverses from 2027 onward. Exporters whose actual emission intensity is above the country default, indicating less-efficient-than-average production, face higher costs from providing actual data. Measurement remains valuable for those producers, because it reveals the investment needed to reduce actual emissions below the default threshold.
How Does an Exporter Begin the Measurement Process?
Start with a monitoring plan. The monitoring plan is a document describing how embedded emissions are measured, calculated, and recorded at the production installation. It defines system boundaries, identifies all emission sources, selects the calculation method from IR (EU) 2025/2547, and names the personnel responsible for data collection. The plan is the foundational document that verifiers review. Exporters planning to provide verified data for 2026 imports must have a monitoring plan in place before production begins in the reporting period. For the full data requirements, the CBAM data requirements for exporters article covers the Communication Template fields, precursor data obligations, and the Operators Portal upload process.
Frequently Asked Questions About CBAM Default Values for Exporters
What are CBAM default values for exporters?
CBAM default values are country-average emission intensity figures, marked up by 10% in 2026, 20% in 2027, and 30% from 2028 onward, that EU importers use when no verified data is available from the production installation. They are set per country and production route under IR (EU) 2025/2621 and always exceed typical actual emission intensities for well-run facilities.
Do CBAM default values apply to the exporter or the EU importer?
CBAM default values apply to the EU importer's certificate calculation. The exporter has no direct legal obligation. However, the importer passes the resulting certificate cost back to the exporter through lower purchase prices or supplier switching, so the financial impact falls on the exporter in practice.
How much more expensive are default values compared to verified actual data?
The difference depends on the product, country, and EU ETS price. For Turkish Portland cement, the gap between the default (approximately 1.584 tCO₂e per tonne) and actual emissions (approximately 0.88 tCO₂e per tonne) produces a gross CBAM cost difference of approximately €49 per tonne at €70 per tCO₂. For Chinese BF-BOF steel slab, the default of 3.167 tCO₂e per tonne versus a typical actual of 1.8 to 2.1 tCO₂e per tonne produces a gap of €70 to €95 per tonne gross.
Can exporters access the CBAM Operators Portal themselves?
Yes. The European Commission's CBAM Operators Portal allows non-EU production installation operators to upload verified emissions data directly and share it with specific EU importers. The portal provides the official Communication Template and video training in multiple languages. Data uploaded by the exporter-operator reduces the importer's reliance on defaults and can be shared across all EU buyer relationships simultaneously.
Is the CBAM default value mark-up permanent?
The mark-up schedule is set in law. The 30% mark-up above the calculated default applies from 2028 onward under IR (EU) 2025/2621 and remains in place for steel, cement, aluminium, and hydrogen unless the implementing regulation is revised. The fertilizer mark-up of 1% is also fixed under current law. Both are subject to revision in future Commission reviews, but no change is proposed as of April 2026.
When should an exporter start measuring emissions?
Exporters targeting the first CBAM declaration deadline of September 30, 2027 (covering calendar year 2026 imports) need a monitoring plan in place at the start of the 2026 reporting period and a verified verification report completed before the EU importer's declaration. Verifier registration with EU authorities opens September 1, 2026. The CBAM exporters hub provides a roadmap for sequencing measurement, verification, and data submission steps within this timeline.
The core principle across all sectors is consistent: CBAM default values are designed to be punitive so that exporters choose measurement over inaction. Producers with actual emissions below the default, the majority of efficiently operated facilities in steel, cement, and aluminium, gain a direct financial benefit from verification. Producers whose actual emissions exceed the default face a different strategic question: reduce emissions, or exit EU markets. The CBAM embedded emissions that verified data measures are the same quantity that drives certificate cost at every stage of the phase-in schedule through 2034. Understanding CBAM embedded emissions in detail shows how scope boundaries and precursor rules determine exactly which emissions enter the calculation.