CBAM Default Values Are Getting More Expensive Every Year — Here Is the Schedule

CBAM Default Values Are Getting More Expensive Every Year — Here Is the Schedule

EU default CBAM values are designed to be expensive, but not in the way they are usually described. Annex IV point 4.1 of Regulation (EU) 2023/956 sets a default at the average emission intensity of each exporting country for the good — with a fallback, where reliable country data cannot be applied, to the average of the 10 exporting countries with the highest emission intensities. On top of that baseline sits a mark-up, and the mark-up increases over time.

If your EU buyer is using default values now, their cost exposure is growing automatically — even if EUA prices stay completely flat.

What EU default values are

Under Implementing Regulation (EU) 2026/1740, whose Annex I replaced the table in IR (EU) 2025/2621 with effect from 1 January 2026, EU default values represent the specific embedded emissions of the least efficient producers in each sector and country combination. They are deliberately set high to create a financial incentive for exporters to provide verified actual data.

For context: the EU default value for iron and steel from Egypt is approximately 4.395 tCO₂e/t. A verified actual SEE of 1.615 tCO₂e/t — as achieved by exporters who have completed the measurement and verification process — reduces the embedded emissions basis for certificate calculation by 63%. At commercial export volumes this difference is worth hundreds of thousands of euros per year.

The mark-up penalty schedule

On top of the already high default values, EU law applies a percentage mark-up as an additional penalty for not providing verified data:

| Year | Mark-up on EU Default | Impact | | --- | --- | --- | | 2026 | +10% (fertilisers +1%) | Applies now — buyers using defaults pay 10% more than the default baseline | | 2027 | +20% (fertilisers +1%) | Published, not a projection — the rate doubles in the first full declaration year | | 2028 onwards | +30% (fertilisers +1%) | Permanent escalation — buyers using defaults pay 30% above an already high baseline |

There is no gap in that schedule to go and look up. Implementing Regulation (EU) 2026/1740, Annex I, introductory part sets all three years in one sentence: "For goods in the cement, iron and steel, aluminium and hydrogen sectors, the mark-up shall be 10 % for the year 2026, 20 % for the year 2027 and 30 % for the year 2028 and onwards." The following sentence puts fertilisers at 1 % for 2026 and onwards.

This means a buyer who continues to use EU default values beyond 2027 faces a compounding cost increase: the baseline is already your exporting country's average rather than your own performance, and the 30% mark-up adds a further premium on top.

A worked example for iron and steel

• Base EU default SEE for Egyptian iron and steel: 4.395 tCO₂e/t
• With 2026 mark-up (+10%): 4.834 tCO₂e/t
• With 2028 mark-up (+30%): 5.714 tCO₂e/t

For a buyer importing 25,000 tonnes per year, at the Q1 2026 certificate price and the 2026 charged share of 2.5% (the CBAM factor for 2026 is 97.5%, so 2.5% of embedded emissions is charged):

• Using the 2026 marked-up default of 4.834 tCO₂e/t: approximately €228,000 annual cost
• Using verified actual SEE of 1.615 tCO₂e/t: approximately €76,000 annual cost
• Annual saving: approximately €152,000

By 2028 the mark-up is 30% and the charged share is 10% — not the 22.5% that belongs to 2029. Holding the same price and volumes, the gap between the marked-up default (5.714 tCO₂e/t) and the verified figure widens to roughly €772,000 a year.

The compounding effect

The mark-up is not the only cost escalation. The CBAM phase-in factor also increases every year — from 2.5% in 2026 to 100% in 2034. This means both the default mark-up and the phase-in factor work against buyers who delay obtaining verified data. The financial case for getting verified now grows stronger every year.

What to tell your EU buyer

Every year your buyer uses EU default values costs them more than it would have cost the previous year — not because EUA prices necessarily increased, but because both the mark-up and the phase-in factor are higher. The conversation to have with your buyer is not "will you need CBAM data?" but "how much is it costing you every month that you do not have it?"

Use the DeCarbonPro Gap Analysis tool to calculate the exact saving your buyer achieves by switching from EU default to your verified actual SEE — and show them the year-by-year cost trajectory.