Introduction: CBAM Liability Starts in 2026

The Carbon Border Adjustment Mechanism (CBAM) is set to enter its next phase in 2026, making CBAM 2026 compliance a critical and immediate challenge for importers. Many importers believe they can postpone meaningful CBAM compliance until free allocations are fully phased out in 2034. But this is a dangerous misunderstanding.

Direct financial liability begins to accrue in 2026, especially for goods with emissions above the EU benchmark.

Worse, relying on default values, as many importers might when supplier data is unavailable, can lead to punitive tax bills, as these values will incorporate a “proportionately designed mark-up” and will likely be much higher than your supplier’s actual data.

The truth: This 97.5% figure applies only to emissions below the EU benchmark, and even that protection fades over time. Any emissions above the benchmark are fully taxable starting in 2026.

What’s Taxed and What’s “Free”?

• Benchmark: The EU assigns a benchmark value for each product type (e.g., 1.5 tCO₂/tonne for primary aluminium).
• Free Allocation: In 2026, 97.5% of benchmark emissions are exempt from allocation. This gradually phases out until reaching 0% by 2034.
• Above the Benchmark: Always fully taxed—no exemptions, even in year one.

How the CBAM Tax Works

CBAM Tax per tonne of product = (Specific Embedded Emissions – (Benchmark × (1 – CBAM Factor))) × CBAM Certificate Price

• Specific Embedded Emissions: This is emissions per tonne of product. For aluminium and iron & steel, this includes direct emissions only; for products like cement, indirect emissions (i.e., electricity) are also included.
• Benchmark: The EU-defined efficiency baseline for the product, which is used to provide relief from the full liability of CBAM as it is phased in.
• CBAM Factor: Starts at 2.5% in 2026 and phases up to 100% by 2034.
• CBAM Certificate Price: Based on the average EU ETS allowance price from the previous week.

CBAM tax is calculated on a per-tonne-of-product basis. To get your full tax liability, multiply by the volume of imported goods.

Reminder: For some goods like aluminium and iron & steel, CBAM applies to direct emissions only.

(Assumptions: no carbon tax paid in the country of origin)

The following illustrative example is for an importer of aluminium rolls:

• Direct Embedded Emissions based on default value: 3.0 tCO₂e/t → 300 tCO₂e
• CBAM Benchmark for aluminium sheets: 1.5 tCO₂e/t
• CBAM certificate price: €80
• CBAM Factor: Starts at 2.5% in 2026 and reaches 100% in 2034

Note: This is an illustrative example showing how CBAM tax liability may increase between 2026 and 2034 as free allocations are phased out, with overall product emissions remaining constant. The benchmark and default values used are for illustrative purposes only. Final figures for the definitive period have not yet been published by the EU.

The truth: In some cases—particularly for small import volumes just above the 50-tonne de minimis threshold—default values may seem convenient. But the CBAM regulations explicitly state that they will include a “proportional mark-up,” essentially acting as a penalty designed to significantly inflate your tax bill.

Why Default Values Can Hurt

The default values will be derived from:

• The worst-performing EU ETS installations (original proposal); or
• The highest emissions intensity among countries with reliable data (per the Omnibus proposal)

“Default values will be based on the “average emission intensity of the ten countries with the highest emission intensities for which reliable data are available.”

Omnibus Proposal, 2025

The Uncertainty Today

• Final default values have not yet been published.
• Benchmarks are still in development, especially for products involving precursors or indirect emissions not covered by current EU ETS benchmarks.

This creates serious uncertainty for importers planning for 2026 onwards.

Even though the CBAM factor phases in gradually, liability begins to accrue in 2026 and can be significant. Worse, importers must prepare in the face of major unknowns:

• What will the final default values be?
• What benchmarks will apply to complex or multi-input goods?
• How will CBAM interact with other national carbon pricing schemes?

Waiting to act is a gamble, and a costly one. Without clear data, forecasting your 2026 costs becomes nearly impossible.

CBAM is not a 2034 problem. It is a 2026 financial obligation that grows in impact year after year.

• The 97.5% exemption applies only to emissions below the benchmark, and it fades fast.
• Emissions above the benchmark are fully taxed from the start.
• Default values are not your friend—they are designed to protect the EU, not your bottom line.

If you’re still relying on assumptions, you’re already at risk.

To stay ahead, importers need visibility, precision, and real data. Now is the time to move from assumptions to actual data.

Artem’s CBAM software platform is built to give you that clarity, helping you model costs, compare supplier data, and make informed decisions. It’s the smartest way to prepare for 2026.