The Carbon Border Adjustment Mechanism (CBAM) creates a direct financial obligation for importers of covered goods into the EU: you must purchase CBAM certificates equivalent to the embedded emissions in your imports. Understanding how to calculate those embedded emissions — and your resulting CBAM cost — is essential for financial planning and compliance.

This guide walks through the CBAM cost calculation methodology with worked examples.

The CBAM cost formula

Your CBAM financial obligation is calculated as follows:

CBAM cost = Embedded emissions (tCO2e) × CBAM certificate price (€/tCO2e) − Carbon price already paid in country of origin

Each element of this formula requires specific data and methodology. Let’s work through each.

Step 1: Calculate embedded emissions

Embedded emissions are the greenhouse gas emissions generated during the production of the imported goods, expressed in tonnes of CO2e per tonne of goods.

There are two approaches:

Default values

The EU has published default embedded emission values for each CBAM sector and country of origin. These defaults represent a conservative estimate — typically above the actual emissions of well-operated facilities. Using default values means your CBAM cost will likely be higher than necessary if your supplier operates efficiently.

Actual production data

If your non-EU supplier can provide verified production emissions data, you can use actual values instead of defaults. This requires the supplier to calculate emissions using the EU-specified methodology and have the results verified by an accredited third party. Actual data almost always results in a lower CBAM cost for suppliers with below-average emissions.

Step 2: Determine the CBAM certificate price

CBAM certificate prices are linked to the EU Emissions Trading System (ETS) auction price. The weekly average EU ETS price determines the price at which CBAM certificates are purchased from the competent national authority.

EU ETS prices have varied considerably over recent years. For financial planning purposes, companies typically model a range of scenarios. For CBAM cost estimates, see our companion guide on CBAM reporting requirements.

Step 3: Deduct carbon price already paid

If the country of origin has a carbon pricing mechanism, and your supplier has paid a carbon price on the embedded emissions, that price can be deducted from your CBAM obligation. This prevents double-charging for carbon where both the exporting country and the EU impose carbon costs.

The deduction is only available if the carbon price is:

• Legally mandated (not voluntary)
• Paid directly on the production emissions (not a general tax)
• Documented and verifiable

Worked example

Let’s assume you import 1,000 tonnes of steel from a country without carbon pricing:

• Default embedded emissions for your steel product: 1.8 tCO2e per tonne of steel
• Total embedded emissions: 1,000 × 1.8 = 1,800 tCO2e
• CBAM certificate price: €60 per tCO2e
• Carbon price in country of origin: €0
• CBAM cost: 1,800 × €60 − €0 = €108,000

If your supplier provides verified actual data showing 1.2 tCO2e per tonne, your cost drops to €72,000 — a saving of €36,000 on the same shipment.

Historical context: the transitional phase

During the CBAM transitional phase (October 2023 – December 2025), importers had to report embedded emissions quarterly but were not required to purchase certificates. This phase ended when the definitive regime began in January 2026. For context on how the requirements have evolved, see the historical CBAM timeline and requirements guide.

How Coolset supports CBAM cost calculation

Coolset’s CBAM module automates embedded emissions calculations, manages supplier data collection, and generates CBAM declarations. Book a demo to see how it works.