South Korea operates the most advanced carbon pricing scheme of any major CBAM-affected exporter — making it the leading Art. 9 deduction candidate globally.
South Korea exports significant volumes of flat-rolled steel, structural sections, and aluminium semi-fabricated products to the EU. POSCO and Hyundai Steel are the principal steel exporters. South Korea's steel default (2.12 tCO₂e/t semi-finished, BF-BOF) is moderate; its aluminium default (0.36 tCO₂e/t secondary route) reflects a scrap-based production profile.
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 | 0.9400 | €75.89 | €47.38 |
Anhydrous ammonia CN 28141000 | Fertilisers | 3.1300 | €232.03 | €122.56 |
Urea (solid) CN 31021019 | Fertilisers | 1.5400 | €114.16 | €60.30 |
Ammonium nitrate CN 31023090 | Fertilisers | 2.2200 | €164.57 | €86.93 |
Steel semi-finished (BF-BOF) CN 72071114 | Iron & Steel | 2.1185 | €171.04 | €106.77 |
Unwrought aluminium CN 7601 | Aluminium | 2.2026 | €177.84 | €111.01 |
Hydrogen CN 28041000 | Hydrogen | 14.0300 | €1132.75 | €707.11 |
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 South Korea: South Korea's K-ETS (Korea Emissions Trading Scheme) has been active since 2015 — the longest-running national ETS among major CBAM-affected exporters. The K-ETS covers steel, cement, and other CBAM-relevant sectors with legally binding, verified carbon pricing.
K-ETS has run since 2015 and covers CBAM-relevant sectors, which makes Korea look like the strongest candidate on this site. The binding constraint is allocation, not coverage: phase 4 (2026-30), approved on 11 November 2025, keeps 100 % free allocation for steel and the other leakage sectors, and Article 9 deducts only what is effectively paid, net of free allocation. A Korean steel good therefore carries close to nothing deductible today. Document what your installation actually settles — if the free-allocation share falls, the deduction becomes real from that year.
Our reading of South Korea'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.
Korean exporters have one cost advantage that is certain and one that is not. The certain one: secondary-route aluminium at 0.36 tCO₂e/t sits below the SEFA benchmark, so it carries no certificate liability whatever happens under Article 9. The uncertain one is the K-ETS deduction — phase 4 keeps steel on 100 % free allocation, and a deduction is only ever worth what was effectively paid after free allocation is taken off. Record what your installation actually settles each year; the day the free share falls, the deduction becomes real.
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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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