The 6 CBAM-covered sectors entered the definitive phase on January 1, 2026, requiring EU importers to purchase certificates priced at the EU ETS carbon rate for every tonne of embedded CO₂ in their imports. Which sectors carry the highest gross costs, and how does your industry fit into the compliance structure? The answer varies sharply by production route, with gross certificate costs ranging from €0 per tonne for green hydrogen to €840 per tonne for grey hydrogen at the current EU ETS price of approximately €70/tCO₂.
This hub covers all 6 sectors defined in Annex I of Regulation (EU) 2023/956, comparing emission factors, gross CBAM costs at €70/tCO₂, and the key compliance characteristic that shapes each sector's obligations. Each section links to its dedicated sector guide and sub-pages. For an introduction to how the mechanism works, the EU CBAM guide at /learn/eu-cbam/ explains the certificate system, authorization requirements, and declaration timeline.
Caption: Gross CBAM certificate costs per tonne of product differ by up to 24-fold across the 6 covered sectors at a €70/tCO₂ ETS price.
What Are the CBAM Covered Sectors?
The 6 CBAM-covered sectors are iron and steel, cement, aluminium, fertilizers, electricity, and hydrogen, selected because they are carbon-intensive, trade-exposed, and at the highest risk of carbon leakage from the EU Emissions Trading System.
The selection reflects Annex I of Regulation (EU) 2023/956. These sectors together account for the majority of EU industrial carbon leakage risk. Each sector has its own CN codes, emission calculation methodology, and default value schedule. The key difference across sectors is whether indirect emissions (from electricity used in production) are priced: cement and fertilizers include both direct and indirect emissions, while steel, aluminium, and hydrogen price direct emissions only.
All 6 CBAM Sectors: Emission Factors and Gross Costs at €70/tCO₂
The table below covers all 6 sectors with representative emission factors, gross certificate costs at the current EU ETS price of approximately €70/tCO₂, and the defining compliance characteristic for each. All costs are gross figures before free allocation adjustment. Net costs in 2026 equal gross cost multiplied by the 2.5% CBAM factor, because 97.5% of free allocation remains in force this year.
| Sector / Product | Emission Factor (tCO₂/t) | Gross Cost @ €70/tCO₂ | Key Compliance Characteristic |
|---|---|---|---|
| Steel, BF-BOF (blast furnace) | ~2.0 | ~€140/t | Direct emissions only; coal/coke combustion dominant |
| Steel, EAF (electric arc, scrap) | ~0.5 | ~€35/t | Direct emissions only; scrap content reduces factor |
| Cement, Portland | ~0.83 | ~€58/t | Both direct and indirect emissions priced |
| Primary aluminium | ~1.5 (direct only) | ~€105/t | PFCs (CF₄, C₂F₆) included alongside CO₂ |
| Urea fertilizer | ~2.5 | ~€175/t | Both direct and indirect emissions priced; N₂O covered |
| Grey hydrogen (SMR) | ~9–12 | €630–840/t | Highest gross cost per tonne of any covered sector |
| Green hydrogen (RFNBO) | ~0 | €0/t | Near-zero embedded emissions; structural export advantage |
| Electricity | Country-specific defaults | Variable | Priced only at point of physical interconnector import |
Steel: Two Production Routes, Two Very Different Costs
Steel is the largest CBAM sector by EU import value, with imports exceeding €15 billion per year. The CBAM steel guide covers all CN codes and both main production routes.
Blast furnace-basic oxygen furnace (BF-BOF) steel carries an emission factor of approximately 2.0 tCO₂ per tonne, generating a gross certificate cost of approximately €140 per tonne at €70/tCO₂. Electric arc furnace (EAF) steel, produced from recycled scrap, carries approximately 0.5 tCO₂ per tonne and a gross cost of approximately €35 per tonne. The production route is therefore the single most important cost variable for steel importers.
Only direct emissions are priced for steel — electricity consumed in production is excluded. Exporters with documented high scrap inputs can present actual emission data below the BF-BOF default to reduce their CBAM liability. The sub-pages below provide the full technical detail for steel compliance.
Steel sub-pages:
- Steel CN codes — full Chapters 72 and 73 code list
- Steel emission benchmarks — default values by production type
- BF-BOF route guide — blast furnace compliance specifics
- EAF route guide — electric arc furnace compliance specifics
- Steel CBAM calculation — step-by-step cost calculation
Cement: Process Chemistry Locks In High Emissions
Portland cement carries approximately 0.83 tCO₂ per tonne, producing a gross CBAM cost of approximately €58 per tonne at €70/tCO₂. The CBAM cement guide explains why this figure is largely irreducible through energy efficiency alone.
Limestone calcination (CaCO₃ → CaO + CO₂) generates approximately 60% of cement's carbon footprint through unavoidable process chemistry. Cement is one of 2 sectors (alongside fertilizers) where both direct and indirect emissions are priced, because electricity consumption in cement kilns is material to the total footprint. Blended cements using slag or fly ash carry lower emission factors (approximately 0.40–0.65 tCO₂/t) due to a reduced clinker ratio.
Cement sub-pages:
- Cement CN codes — codes 2523 10 through 2523 90
- Clinker embedded emissions — clinker-to-cement ratio calculations
Aluminium: Perfluorocarbons Add Complexity
Primary aluminium carries approximately 1.5 tCO₂ per tonne for direct emissions, generating a gross cost of approximately €105 per tonne at €70/tCO₂. The CBAM aluminium guide covers both CO₂ and the perfluorocarbon emissions unique to this sector.
Aluminium smelting produces 2 classes of greenhouse gases: CO₂ from anode consumption and perfluorocarbons (PFCs), specifically CF₄ with a global warming potential of 6,630 and C₂F₆ with a global warming potential of 11,100. These PFC emissions occur during "anode effect" events and are included in the CBAM calculation. Indirect emissions from the electricity-intensive smelting process (approximately 14–16 MWh per tonne) are not priced for aluminium under CBAM, but default values incorporate the full carbon profile of each source country's grid.
Aluminium sub-pages:
- Aluminium CN codes — codes 7601 through 7616
- Indirect emissions and aluminium — why indirect costs still matter
- PFC emissions guide — CF₄ and C₂F₆ calculation
Fertilizers: Highest Cost Among Agricultural Inputs
Urea fertilizer carries approximately 2.5 tCO₂ per tonne, generating a gross certificate cost of approximately €175 per tonne at €70/tCO₂. The CBAM fertilizers guide covers the Haber-Bosch production chain and all relevant CN codes.
All nitrogen fertilizers derive from ammonia produced via the Haber-Bosch process, with hydrogen currently sourced from natural gas in 99% of global production. Both direct and indirect emissions are priced for fertilizers — 1 of only 2 CBAM sectors with this double-pricing treatment. Ammonium nitrate carries approximately 1.5–2.0 tCO₂ per tonne, and urea-ammonium nitrate (UAN) solution carries approximately 1.0–1.5 tCO₂ per tonne. N₂O from soil application after use is not included in the CBAM calculation.
Fertilizer sub-pages:
- Fertilizer CN codes — codes 2808, 2814, 3102, 3105
- Ammonia CBAM guide — Haber-Bosch process emissions
- Urea CBAM guide — urea-specific calculation and defaults
Electricity: Country-Specific Default Values Apply
Electricity (CN code 2716 00 00) is the only sector with a single CN code. The CBAM electricity guide explains how physical interconnectors and country-specific carbon intensities determine the compliance calculation.
Carbon intensity defaults for electricity are set on a per-country basis, reflecting each exporting country's average grid carbon intensity. Electricity is the most technically complex sector because grid carbon intensity varies hourly, and the embedded emissions of an imported electron depend on the marginal generator at the exact time of import. Countries connected to the EU grid via physical interconnectors, such as Ukraine, Morocco, and the UK, are the primary affected parties.
Electricity sub-pages:
- Electricity default values — country-specific tCO₂/MWh defaults
- Interconnector imports — which countries have active interconnectors
Hydrogen: The Widest Cost Range of Any CBAM Sector
Hydrogen carries the widest cost range of all 6 CBAM sectors: approximately €0 per tonne for green hydrogen produced via renewable electrolysis and €630–840 per tonne for grey hydrogen produced by steam methane reforming (SMR) without carbon capture, at the current €70/tCO₂ ETS price. The CBAM hydrogen guide covers all production routes and their embedded emission calculations.
Grey hydrogen from SMR generates approximately 9–12 tCO₂ per tonne of hydrogen. Green hydrogen produced using electricity that meets the EU's Renewable Fuel of Non-Biological Origin (RFNBO) criteria carries approximately zero embedded emissions, resulting in approximately zero CBAM cost. This structural difference creates a growing commercial incentive for exporters in Morocco, Chile, Australia, and Saudi Arabia to develop certified green hydrogen supply chains.
Hydrogen sub-pages:
- Green hydrogen CBAM guide — RFNBO criteria and zero-emission verification
- Grey hydrogen CBAM guide — SMR emissions and default cost calculations
How Net CBAM Costs in 2026 Differ from Gross Costs
Gross CBAM costs represent the full certificate value before the free allocation adjustment. Net CBAM cost in 2026 equals gross cost multiplied by the 2.5% CBAM factor, because the free allocation phase-out removes only 2.5% of allocations in 2026 while 97.5% remains. This means the net cost for BF-BOF steel at €70/tCO₂ is approximately €3.50 per tonne in 2026, not €140.
The phase-out accelerates sharply: by 2030, the CBAM factor reaches 48.5%, and free allocation is fully eliminated by January 1, 2034. Importers planning multi-year procurement contracts need to factor in this escalation, not just the 2026 net cost.
The 4 key facts about net CBAM costs in 2026 are listed below.
- Net cost = gross cost × 2.5% (the 2026 CBAM factor)
- Example: BF-BOF steel gross €140/t × 2.5% = net €3.50/t in 2026
- Example: Grey hydrogen gross €630–840/t × 2.5% = net €15.75–21/t in 2026
- Free allocation reaches zero by January 1, 2034, at which point gross and net costs are equal
Caption: The CBAM factor rises from 2.5% in 2026 to 100% in 2034, making gross and net costs identical at full phase-out.
CBAM Compliance by Sector: Supplementary Reference
Which CBAM Sectors Include Indirect Emissions?
2 of the 6 CBAM sectors price both direct and indirect emissions: cement and fertilizers. The remaining 4 sectors (steel, aluminium, hydrogen, and electricity) price direct emissions only. Cement and fertilizers include indirect emissions because electricity consumption is a material portion of their total carbon footprint and excluding it would leave a significant leakage pathway unaddressed.
Are All CBAM Products Subject to the 50-Tonne De Minimis Threshold?
The 50-tonne annual mass threshold exempts small importers from CBAM obligations, but electricity and hydrogen are excluded from this de minimis provision under Article 2(3a) as amended by Regulation (EU) 2025/2083. An importer bringing less than 50 tonnes per year of steel, cement, aluminium, or fertilizer products across all shipments from all non-EU origins is not required to register as an authorized declarant or surrender certificates.
When Do CBAM Certificate Costs Become Material for These Sectors?
Certificate sales begin on February 1, 2027, and the first CBAM declaration covering calendar year 2026 imports is due September 30, 2027. The 2026 net cost is modest for all sectors because the CBAM factor is only 2.5%. Costs become commercially material between 2028 and 2030, when the CBAM factor reaches 10% and then 48.5% respectively.
Importers and exporters across all 6 sectors can find sector-specific compliance guidance in the following cross-sector resources:
- Importer compliance by sector — authorization, registry, and certificate surrender obligations
- Exporter obligations by sector — documentation, verification, and strategic response options