As the EU’s Carbon Border Adjustment Mechanism (CBAM) shifts from reporting only to payment, importers need to go beyond just tracking emissions and start understanding the financial implications.

While certificate payments don’t kick in until January 2026, the groundwork for cost exposure is already being laid, in quarterly reports, supplier data, and internal systems.

This article walks you through how CBAM costs are calculated, using the official formula and real product examples. You’ll learn what data is required, including CN codes, embedded emissions, and the EU ETS carbon price, and how to model likely costs across different scenarios.

What is the CBAM cost and how is it calculated?

Your CBAM costs depend on the quantity of emissions embedded in your imported goods—that is, the CO₂e generated during the production of these products. This quantity is then multiplied by the weekly average price of EU Emissions Trading System (EU ETS) allowances, as published by the European Commission.

Here’s a simple formula to remember:

CBAM cost = quantity × embedded emissions × weekly EU ETS price

Although payments don’t begin until 2026, importers are already required to monitor and report emissions. This means businesses can (and should) already estimate their future financial exposure now. 

Transitional phase vs. definitive phase: What’s the difference?

CBAM is being rolled out in two key stages: the transitional (reporting only) phase and the definitive (payment) phase. Understanding the difference between them is essential for staying compliant, and financially prepared.

Transitional phase (1 October 2023 to 31 December 2025)

Right now, importers are required to track and report the embedded emissions in CBAM-covered goods they bring into the EU. This means submitting quarterly reports that include the quantity of goods and the CO₂e emissions linked to their production.

No payments are required yet, but accuracy is important as this data will form the basis for future costs.

Definitive phase (starting 1 January 2026)

From 2026 onward, importers must purchase and surrender CBAM certificates to cover the embedded emissions in their imports. The cost of these certificates will be based on the weekly EU ETS carbon price, making CBAM a real financial obligation, not just a reporting exercise.

Reporting moves from quarterly to annual, with the first full-year report due by 31 May 2027. Verified emissions data is required, in line with the EU’s CBAM methodology. And the use of default values is restricted. For complex goods, defaults can only account for up to 20% of total reported emissions.

Key inputs needed to calculate CBAM costs

To accurately estimate your CBAM costs, you’ll need to gather some key data points for each type of imported good. 

These include:

1. The CN code

The Combined Nomenclature (CN) code of the imported product which helps you figure out whether it falls under the scope of CBAM.

2. Quantity imported

The amount of each CBAM-regulated product, measured in metric tonnes, based on its specific CN code. 

3. Embedded emissions per tonne

The amount of greenhouse gases released during the production of a product, measured per tonne of that product. This must be based on verified data from your supplier.

4. EU ETS price

The weekly average EU ETS allowance price, published by the European Commission in the CBAM Transitional Registry.

For example, as of June 2025, the average price was approximately €72.67 per tonne of CO₂e. If you were importing goods with 1,000 tonnes of embedded CO₂ emissions, your CBAM certificate cost would be around €72,670 at that price point.

Supplier data vs. default values

Between 1 October 2023 and 30 June 2024, importers could use default values published by the EU for up to 100% of reported emissions if supplier data wasn’t available or verifiable.

But as of 1 July 2024, the rules have changed. Default values can now only be used for complex goods for only up to 20% of total reported emissions. This limitation applies through the rest of the transitional phase, ending 31 December 2025.

Be warned: Default values are typically conservative and often overestimate actual emissions, which can inflate your CBAM costs. Using verified supplier data leads to more accurate, and often lower, estimates.

What about indirect emissions?

During the transitional phase, for monitoring purposes, importers must report both direct and indirect emissions for all goods falling under the scope of CBAM.

In the definitive phase, only direct emissions must be declared for iron and steel, aluminium, and hydrogen, while importers of cement and fertilisers will need to report both direct and indirect emissions.

The CBAM cost formula explained (with an example)

Based on the CBAM cost formula (CBAM cost = quantity × emissions per tonne × EU ETS price) let’s walk through a simple example using CN code 7307 11, which covers tube or pipe fittings of non-malleable cast iron.

Example calculation

• Quantity imported: 100 tonnes
• Emissions per tonne: 2.3 tCO₂e (actual reported data from supplier)
• EU ETS price: €80 per tonne CO₂e (weekly average)
  

CBAM cost = 100 × 2.3 × 80 = €18,400

This is the estimated cost the importer would face in the definitive (payment) phase (starting January 1, 2026) for this shipment.

What if you use default emissions values?

The European Commission’s default value for tube or pipe fittings of non-malleable cast iron is higher than actual supplier emissions. In this case, the default value is 3.11 tCO₂e per tonne, meaning the same shipment would cost:

CBAM cost = 100 × 3.11 × 80 = €24,880

That’s a €6,480 increase, just from using default data.

Remember: Starting 1 July 2024 and lasting through the end of the transitional phase on 31 December 2025, default values are only permitted for complex goods, and only up to 20% of total reported emissions

How to prepare for future CBAM certificate costs

While payments for CBAM certificates won’t begin until 2026, smart importers are already preparing. By forecasting your likely cost exposure now, you can reduce financial risk, and avoid nasty surprises later.

Here’s how to get started:

1. Forecast cost exposure for key products and suppliers

Focus first on high-volume or high-emission goods, and suppliers in countries without strong carbon pricing. Use the CBAM cost formula to model different scenarios and identify where your biggest liabilities may sit.

2. Estimate the ETS price ranges

The EU ETS carbon price fluctuates. For planning purposes, assume a price range of €70–100 per tonne of CO₂e. Build your forecasts using both conservative and worst-case pricing to understand your potential exposure.

3. Engage suppliers early

Request verified emissions data from your suppliers now, especially for complex goods. This step directly impacts your future CBAM costs, as embedded emissions (both direct and indirect) are a core input in the cost calculation formula.

Engaging suppliers early gives them time to calculate or verify emissions in line with EU requirements.

4. Align reporting with budgeting

Use your quarterly CBAM reports as the basis for internal forecasting and financial planning. From 2026, these reports will become the trigger for CBAM certificate purchases, so aligning now helps streamline budgeting later.

Tools that support CBAM cost forecasting

Spreadsheets can get you started, but they won’t take you far. As reporting requirements grow more complex, manual tracking across multiple CN codes, products, and suppliers becomes time-consuming, error-prone, and nearly impossible to scale.

That’s where purpose-built tools come in.

Why spreadsheets fall short

• Difficult to manage large, diverse supply chains. In fact, 60% of finance executives say they already struggle with ESG data spread across disconnected tools and teams.
• No built-in logic for emission factors, default values, or EU ETS price updates
• No audit trail or version control for submitted reports
• Manual effort increases the risk of errors and missed reporting deadlines. Studies show that 94% of spreadsheets used for business decisions contain errors, most caused by manual input.

What better tools can offer

Emerging platforms, like Coolset, are building solutions to help importers:

• Map products to embedded emissions more efficiently
• Automate CBAM calculations across categories and suppliers
• Simulate future costs under different ETS price and emissions scenarios
• Track documents and traceability data in one place
• Align CBAM and CSRD workflows, avoiding duplication of effort
  

While the ecosystem is still in its early stages, adopting the right tool early can save hours of work, and prevent costly mistakes down the line.

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FAQs – CBAM cost calculation and certificate pricing

Let’s walk through some frequently asked questions about CBAM cost calculations and CBAM certificate prices.

How do I calculate CBAM costs?

Use this formula: CBAM cost = quantity × embedded emissions per tonne × weekly EU ETS price. You’ll need to run this calculation for each CBAM-covered good you import. 

For example, let’s say you’re importing 500 tonnes of unwrought aluminium (CN code 7601). Assume your supplier provides verified emissions data showing embedded emissions of 4.9 tCO₂e per tonne. If the average weekly EU ETS price is €75 per tonne, then your CBAM cost would be: 500 × 4.9 × 75 = €183,750.

What inputs do I need for CBAM cost calculation?

You’ll need:

• The CN code of the imported good
• The quantity imported (in tonnes)
• The embedded emissions per tonne (either verified or default)
• The weekly average EU ETS price, published by the European Commission.

When do CBAM certificate payments start?

The payment phase begins in 2026. Until then, importers are required to report embedded emissions quarterly but do not need to purchase certificates.

Can I use my supplier’s data instead of EU defaults?

Under CBAM rules, using verified emissions data from your suppliers is the standard.

As of 1 July 2024 (Q3 2024), the use of default values is restricted to complex goods, and cannot exceed 20% of total reported emissions. Relying solely on defaults is no longer allowed, making supplier data a non-negotiable for compliance.

Is there a CBAM calculator I can use?

The European Commission provides a CBAM Communication Template for Installations, but it’s a complex spreadsheet, useful for initial reporting, but difficult to scale across multiple products, suppliers, and CN codes.

Platforms like Coolset are now developing more advanced tools to automate calculations, map emissions data, and simulate future CBAM costs, all in one place.

Next steps: Use your time wisely

With the definitive (payment) phase starting on January 1, 2026, the current reporting period offers a valuable window for businesses to get financially prepared. 

Use this time to forecast your CBAM cost exposure, starting with the products and suppliers likely to carry the highest emissions. The more accurate your data now, the more confident your cost estimates will be later.

Need help getting CBAM-ready?

Coolset helps importers streamline emissions tracking, engage suppliers, and stay compliant, without the hassle. Reach out today to learn more.