Default vs. Real Values: Why Your CBAM Bill Is Probably Too High

Default vs. Real Values: Why Your CBAM Bill Is Probably Too High

Under CBAM, every tonne of steel you import into the EU is charged for its embedded carbon. The question is whichcarbon number gets used — and that single choice can multiply your bill.

There are two ways your emissions can be counted: real values and default values.

Real values are the actual, measured, third-party-verified emissions of the steel you bought. If that steel was made cleanly — say, in an electric arc furnace running on scrap — its real number is low, and so is your CBAM cost.

Default values are what CBAM applies when verified data isn't available. And here's the catch most importers miss: these defaults are deliberately set high. They're based on the most carbon-intensive production routes, precisely so that no one can benefit from hiding poor data. They are a penalty, not an estimate.

So two identical shipments of the same clean steel can carry completely different CBAM costs — one taxed on its low real footprint, the other on a punitive default several times higher. Same steel. Same mill. Very different bill.

This is where most importers quietly overpay. Their supplier produces genuinely low-carbon steel, but can't or won't hand over verified emissions data in a usable format. With no real value to declare, the default kicks in — and the buyer pays for emissions that were never theirs.

The fix isn't complicated: get the real, verified data, and make sure it travels with the material all the way to your CBAM declaration. The cleaner your steel actually is, the more you have to gain from proving it.

As the CBAM phase-in factor climbs toward 2034, the gap between default and real values only grows. The importers who lock in verified low-carbon supply now are the ones who won't be overpaying later.