China faces the highest default embedded emissions across Steel, Aluminium and Cement — carrying some of the largest CBAM cost exposure globally.
China is the world's largest producer of steel, aluminium, and cement. EU-bound exports include structural steel sections, flat-rolled products, tubes, and primary aluminium semi-fabricates. Chinese steel and aluminium default values are among the highest in IR (EU) 2026/1740 Annex I, reflecting coal-intensive production. Chinese ammonia carries a default of 4.36 tCO₂e/t — the highest of any major exporting country.
Source: IR (EU) 2026/1740 Annex I, which replaced the Annex I of IR (EU) 2025/2621 from 1 January 2026 · Default = the published total-emissions value · Net cost adds the Annex I mark-up once — 10% in 2026 and 30% from 2028 for cement, iron and steel, aluminium and hydrogen, 1% for fertilisers · Used when verified actual data is not provided
| Product | Sector | Default tCO₂e/t | Net cost 2026 €/t | Net cost 2030 €/t |
|---|---|---|---|---|
Grey Portland cement CN 25232900 | Cement | 1.4200 | €114.65 | €71.57 |
Anhydrous ammonia CN 28141000 | Fertilisers | 4.3600 | €323.22 | €170.72 |
Urea (solid) CN 31021019 | Fertilisers | 2.8500 | €211.28 | €111.60 |
Ammonium nitrate CN 31023090 | Fertilisers | 3.3700 | €249.82 | €131.96 |
Steel semi-finished (BF-BOF) CN 72071114 | Iron & Steel | 3.1688 | €255.84 | €159.71 |
Unwrought aluminium CN 7601 | Aluminium | 3.0000 | €242.21 | €151.20 |
Hydrogen CN 28041000 | Hydrogen | 26.6400 | €2150.85 | €1342.65 |
Net cost = default tCO₂e/t × €75.28 (Q2 2026, official price of CBAM certificates) × CBAM phase-in factor (2.5% in 2026, 48.5% in 2030). Actual liability depends on verified embedded emissions and SEFA benchmark deduction. Values shown are for illustrative default scenario only.
Carbon pricing in China: China's national ETS (CN-ETS) covers the power generation sector but does not currently impose a verified, reported carbon price on steel, aluminium, or cement production.
China's national ETS was extended to cement, steel and aluminium by the MEE work plan of 20 March 2025 — the sectors that matter for CBAM are inside the scheme, not outside it. What Article 9 asks is different: allowances for the 2024 compliance year were allocated free at 100 % of verified emissions, and the deduction is net of any free allocation, so almost nothing has been effectively paid on these goods for a declarant to claim. Watch the allocation benchmark rather than the coverage announcement — the day free allocation tightens is the day a real deduction appears.
Our reading of China's own published measures as at September 2026, not an EU-published value — third-country carbon policy changes without warning. Confirm the current position with advisers in the country of production before pricing anything on it.
Chinese producers face the highest default values of any major CBAM-affected country — steel semi-finished at 3.17 tCO₂e/t (BF-BOF) and primary aluminium at 3.00 tCO₂e/t. Producers with actual emissions below these defaults have a strong financial case for verification. The gap between default and actual can represent tens of millions of euros in certificate costs for large-volume exporters by 2030.
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Book a demoDefault values sourced from IR (EU) 2026/1740 Annex I (European Commission). Net costs are illustrative — actual liability depends on verified embedded emissions, SEFA benchmark deduction, and the applicable CBAM phase-in factor. Not legal or compliance advice.
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