EU CBAM for Steel Importers: Embedded Emissions, Certificate Costs & the 2027 Compliance Deadline

A CBAM Journal Research Report

Sekason Research Limited  ·  cbamjournal.com

Research Position Date: 13 August 2026

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1. Executive Summary

The EU CBAM definitive regime has applied since 1 January 2026. The official Q2 2026 CBAM certificate price is €75.28/tCO₂. The first annual CBAM declaration and corresponding certificate surrender for goods imported during 2026 are due 30 September 2027. These three facts define the compliance environment for the next sixteen months, and they carry consequences the transitional period did not.

The compliance challenge is no longer conceptual. Every tonne of CBAM-covered steel imported since 1 January 2026 is accumulating a certificate liability that must be quantified, verified and surrendered. The importer that has not yet established authorised declarant status, built a product-level embedded-emissions data chain or begun tracking certificate exposure is operating without the controls required to meet that deadline.

Five issues require immediate action.

• First: authorised CBAM declarant status — importing CBAM-covered steel without it is not a procedural gap; it is a compliance failure.

• Second: CN-code scope determination at product level, not sector level — the word “steel” does not determine CBAM coverage.

• Third: embedded-emissions data architecture — the decision between actual and default values must be made for each supplier installation, and actual emissions require verification.

• Fourth: certificate exposure tracking using the verified 2026 quarterly prices.

• Fifth: the 50% quarterly certificate-account requirement from 2027, which generates compliance tests in March and June 2027, months before the September surrender deadline.

Table 1: Five CBAM Compliance Facts Every Steel Importer Needs to Know

Fact	Detail
Definitive regime start date	1 January 2026
Official Q1 2026 certificate price	€75.36/tCO₂
Official Q2 2026 certificate price	€75.28/tCO₂
Quarterly certificate-account threshold from 2027	50% of cumulative embedded emissions at each quarter-end
First annual declaration and surrender deadline	30 September 2027 (covering all 2026 imports)

 This report provides a compliance control framework for steel importers operating under the EU CBAM definitive regime. It covers the legal architecture governing scope, authorisation and certificate obligations; the embedded-emissions data chain from supplier installation through to Registry declaration; the financial exposure model and its components; verified 2026 certificate-price data; the 50% quarterly requirement and its cash-management implications; penalty structure; sector context; real-world producer case studies; a 10-step readiness model; a supplier data checklist; an internal control matrix; and a 30 September 2027 readiness test.

It does not publish a universal CBAM cost per tonne of steel, because no such figure can be defended without specifying the product, production route, installation and eligible deductions.

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2. Regulatory Context: What EU CBAM Now Requires

2.1 EU CBAM Definitive Regime: What Changed on 1 January 2026

• FINDING: The EU CBAM definitive regime began on 1 January 2026, ending the transitional reporting period (October 2023–December 2025) and triggering financial obligations — certificate purchase and surrender — that did not exist under the transitional framework.

• SO WHAT: Transitional-period guidance and internal procedures built before 1 January 2026 cannot be carried forward without review, because the financial stakes are now operative.

• NOW WHAT: Audit every internal CBAM procedure against the definitive-regime obligations in Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083 and confirm it is current before 31 December 2026.

Two changes define the shift from transitional to definitive. The transitional obligation was quarterly emissions reporting through the CBAM transitional registry — a data-collection exercise without a direct financial consequence. The definitive obligation is financial: purchase CBAM certificates, hold them in the CBAM Registry account, maintain the 50% quarterly threshold from 2027, and surrender the required number by 30 September each year. The reporting obligation has become a certificate obligation.

The second change is verification. Under the definitive regime, actual emissions submitted in a declaration are subject to verification requirements. A supplier declaration that satisfied the transitional framework may not be sufficient to support an actual-emissions claim under the definitive rules. The Commission published its verification and accreditation framework on 30 June 2026 and held a dedicated verifier webinar on 31 July 2026, signalling that verification is now operationally expected.

Table: Transitional vs Definitive EU CBAM

Dimension	Transitional (Oct 2023–Dec 2025)	Definitive (From 1 Jan 2026)
Primary obligation	Quarterly emissions reporting	Annual declaration + certificate surrender
Financial consequence	None	Certificate purchase and surrender required
Verification requirement	Not mandated	Required for actual emissions
Declarant status	CBAM declarant (transitional)	Authorised CBAM declarant (definitive)
Registry	CBAM Transitional Registry	CBAM Registry (definitive)
Penalty exposure	Limited	Article 26 applies in full

2.2 Which Steel Imports Fall Within CBAM?

• FINDING: Iron and steel are confirmed as one of the six sectors covered by the EU CBAM definitive regime under Regulation (EU) 2023/956 and Annex I thereof, as amended by Regulation (EU) 2025/2083, with scope determined at CN-code level rather than at sector level.

• SO WHAT: An importer cannot determine CBAM exposure from the word “steel” alone — specific products within a steel import portfolio may fall inside or outside Annex I, and the classification determines every obligation that follows.

• NOW WHAT: Complete a CN-code-to-CBAM-Annex-I mapping for every steel product in the import portfolio before the first annual declaration due 30 September 2027.

EU CBAM scope for iron and steel is established by Annex I of Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083. The sector description confirms that iron and steel are within scope, but coverage is not universal for all products commercially described as steel — the Annex I CN-code list determines which specific goods attract CBAM obligations.

Research limitation: The current consolidated Annex I CN-code inventory for iron and steel is established in the text of Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083. Importers should verify specific product classifications against the current consolidated Annex I text at EUR-Lex and confirm classification with a customs adviser before the 30 September 2027 declaration. This report does not reproduce the CN-code list because any reproduction from a secondary source risks using a non-current version.

Table 3: Steel CBAM Scope Determination Framework

Step	Question	If Yes	If No
1 — Product	Is this an iron or steel product?	Proceed to Step 2	No CBAM obligation for this product
2 — CN code	Does the CN code appear in Annex I of Reg. (EU) 2023/956?	Proceed to Step 3	No CBAM obligation for this product
3 — Threshold	Do annual CBAM-covered imports exceed 50 tonnes?	Authorised declarant required; proceed to Step 4	Below threshold — monitor volume
4 — Declarant status	Is the importer an authorised CBAM declarant?	Proceed to compliance obligations	Apply immediately
5 — Data chain	Has the embedded-emissions data chain been established?	Proceed to exposure calculation	Build data chain before 31 Dec 2026

2.3 The 50-Tonne Threshold and Authorised CBAM Declarant Status

• FINDING: The European Commission states that importers exceeding 50 tonnes of CBAM goods must apply for authorised CBAM declarant status under Article 5 of Regulation (EU) 2023/956, with the application process governed by Commission Implementing Regulation (EU) 2025/486 as amended by Commission Implementing Regulation (EU) 2025/2549.

• SO WHAT: An importer above the 50-tonne threshold that has not confirmed its authorisation status faces a fundamental compliance failure — importing CBAM-covered steel without the required status is a breach of the definitive regime, not a procedural gap.

• NOW WHAT: Confirm current annual volume of CBAM-covered steel imports against the 50-tonne threshold and, if not already authorised, initiate the application through the CBAM Registry before the end of Q1 2027.

The 50-tonne threshold is a single annual mass-based test applied to the aggregate of all CBAM-covered goods imported, not calculated per product line or per supplier. For most active steel importers, the threshold will be exceeded. Authorised declarant status is required to submit the annual CBAM declaration and to hold and surrender certificates through the CBAM Registry. An importer accumulating a certificate liability without this status has no mechanism to discharge it.

Where an importer uses an indirect customs representative for customs procedures, the CBAM declaration obligation nonetheless remains with the importer unless the representative has explicitly accepted that responsibility under the CBAM framework — a materially distinct arrangement from a standard customs-broker relationship that must be documented explicitly as part of internal ownership of the obligation.

2.4 The Legal Instruments Behind Steel Importer Obligations

• FINDING: Six binding EU legal instruments now govern the specific obligations of steel importers, spanning scope, authorisation, default values, certificate pricing and certificate holding, with the most recent — Commission Implementing Regulation (EU) 2025/2549 — dating from within the last year.

• SO WHAT: Compliance decisions based on a single regulation or informal guidance may be materially incomplete — each operational obligation in this report traces to a specific named legal instrument that must be consulted directly.

• NOW WHAT: Build the company’s CBAM compliance procedure against each instrument in Table 2 and confirm each is the current consolidated version before 31 December 2026.

Table 2: EU CBAM Legal Instrument Map for Steel Importers

Instrument	Governs	Key Provisions
Regulation (EU) 2023/956	Core CBAM framework: scope, authorisation, declaration, certificates, penalties	Articles 2, 5, 6, 7, 8, 20–22, 26; Annex I
Regulation (EU) 2025/2083	Amends 2023/956: 50% quarterly threshold, 50-tonne de minimis, 30 September deadline	Amends Articles 6 and 22(2)
Implementing Reg. (EU) 2025/486	Authorised CBAM declarant: application and eligibility	All articles
Implementing Reg. (EU) 2025/2549	Amends 2025/486: updated authorisation procedure	All amending articles
Implementing Reg. (EU) 2025/2621	Definitive-period default values and benchmarks	All articles; Annexes
Implementing Reg. (EU) 2025/2548	Certificate pricing methodology; weekly pricing from 2027	All articles

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3. Compliance Obligations: What the Importer Must Actually Do

3.1 Establish and Maintain Authorised Declarant Status

• FINDING: Commission Implementing Regulation (EU) 2025/486, as amended by Commission Implementing Regulation (EU) 2025/2549, establishes the eligibility conditions and application process for authorised CBAM declarant status, mandatory for any importer exceeding the 50-tonne annual threshold under Article 5 of Regulation (EU) 2023/956.

• SO WHAT: Without authorised declarant status, the importer cannot submit a CBAM declaration or surrender certificates — making every CBAM-covered steel import a compliance failure rather than a managed liability.

• NOW WHAT: Verify authorisation status and, if not confirmed, initiate the application through the CBAM Registry before Q1 2027 to ensure capacity for the first 50% certificate-account test on 31 March 2027.

Authorisation is a prerequisite, not a formality. The CBAM Registry account, through which certificates are purchased, held and surrendered, is accessible only to authorised CBAM declarants. A company importing CBAM-covered steel that has not completed the authorisation process is accumulating a certificate liability with no mechanism to discharge it.

The application process requires specified information about the business, the CBAM goods and any customs representative arrangements. Commission Implementing Regulation (EU) 2025/2549 updated the authorisation procedure following the 2025 legislative amendments; any application must be made against the current requirements in that instrument, not earlier guidance. Where an importer uses an indirect customs representative, the CBAM obligation remains with the importer unless the representative has accepted responsibility under the CBAM framework — a distinction that must be explicitly documented.

3.2 Build the Steel Embedded-Emissions Data Chain

• FINDING: The EU CBAM definitive regime requires authorised declarants to determine embedded emissions using either actual or legally defined default values, with actual emissions subject to verification requirements confirmed by the Commission’s 30 June 2026 accreditation framework — and every tonne of steel imported since 1 January 2026 is accumulating a certificate liability that must be traceable to a verified data chain by 30 September 2027.

• SO WHAT: Every tonne of steel imported without a documented embedded-emissions record creates a data gap that defaults the liability to statutory default values, which may be higher than actual emissions for efficient production routes.

• NOW WHAT: Establish supplier-level embedded-emissions data collection and verification controls for every CBAM-covered steel supplier by 31 December 2026.

  
  

The embedded-emissions data chain for a steel import runs in sequence:

Import record → product identification → CN-code confirmation → supplier installation identification → production process mapping → embedded-emissions calculation (actual or default) → verification where actual emissions are used → carbon-price deduction evidence where applicable → importer calculation → Registry declaration. Each step must produce documented evidence.

Steel embedded emissions under EU CBAM are assessed on the basis of direct emissions from the production process — not indirect electricity emissions. This distinguishes steel from aluminium, where indirect electricity emissions receive separate treatment, and from cement and fertilisers, which have sector-specific methodologies. Applying another sector’s embedded-emissions boundary to steel creates a miscalculation risk that may not be detected until verification or audit.

Table 5: Steel Embedded-Emissions Evidence Chain

Stage	Evidence Required	Responsible Party
Import record	Customs entry, product description, quantity in tonnes	Importer
Product identification	Product name, CN code, Annex I confirmation	Importer / customs adviser
Supplier installation	Installation name, location, CBAM registration reference	Supplier
Production process	Process type (e.g. BF-BOF, EAF); relevant precursors	Supplier
Embedded emissions	tCO₂ per tonne of product — actual or applicable default	Supplier (actual) / Implementing Reg. 2025/2621 (default)
Verification (actual)	Verification report from accredited verifier	Accredited verifier
Carbon-price deduction	Evidence of any carbon price paid in country of origin	Importer / supplier
Certificate calculation	Exposure model: embedded emissions × certificate price − deductions	Importer
Registry declaration	Submitted annual CBAM declaration	Importer (authorised declarant)

3.3 Actual Emissions vs Default Values

• FINDING: Commission Implementing Regulation (EU) 2025/2621, published on 13 February 2026, establishes the legally binding default values for the definitive period, while the Commission issued specific actual-versus-default guidance in a factsheet dated 23 June 2026, confirming that the two pathways carry materially different evidence and verification requirements.

• SO WHAT: An importer relying on actual emissions that cannot withstand verification faces reversion to default values; an importer using default values where actual emissions are lower forfeits the financial benefit of the lower certificate exposure.

• NOW WHAT: Complete an Actual vs Default Decision Matrix for every significant steel supplier, documented and reviewed, by 31 December 2026.

The choice between actual and default values is consequential in both directions. Actual emissions from specific installations may be substantially lower than the applicable default value — particularly for electric arc furnace routes. Using default values where verified actual data is available leaves the importer with a higher certificate exposure than the physical reality warrants. Conversely, claiming actual emissions without adequate supplier data or verification creates a declaration that may not withstand audit.

Research limitation: The specific default values for individual steel production routes established in Commission Implementing Regulation (EU) 2025/2621 are not reproduced in this report because they must be verified against the current consolidated text at EUR-Lex. Any reproduction from a secondary source risks using a superseded figure. Compliance managers should access the specific applicable default value directly from EUR-Lex before making the actual/default decision for any supplier installation.

Table 4: Actual vs Default Emissions — Comparison Framework

Dimension	Actual Emissions	Default Values
Source	Supplier installation-specific data	Implementing Regulation (EU) 2025/2621
Verification required	Yes — accredited verifier	No
Supplier data burden	High — installation-specific records required	Low
Declaration defensibility	High if properly verified	Legally compliant; may not reflect actual intensity
Where actual < default	Reduces certificate exposure relative to default	Default applies regardless of actual intensity
Where actual > default	Increases certificate exposure	Default acts as a practical ceiling
Commission guidance	Factsheet issued 23 June 2026	Implementing Reg. 2025/2621 (13 Feb 2026)
Importer action	Obtain and verify supplier data; engage accredited verifier	Source current instrument from EUR-Lex

3.4 Supplier Data and Verification Requirements

• FINDING: The Commission published its verification and accreditation framework on 30 June 2026 and held a dedicated CBAM verifier webinar on 31 July 2026, making the provision of verifiable emissions data an operationally active requirement for all 2026 steel imports.

• SO WHAT: A supplier emissions declaration not backed by verifiable installation-level data may be insufficient to support an actual-emissions claim in the 30 September 2027 annual declaration, defaulting the importer to the higher statutory default values.

• NOW WHAT: Issue a standardised CBAM supplier data request and evidence checklist to all suppliers of CBAM-covered steel by 31 December 2026.

The evidence a steel importer should request from each supplier covers nine categories: installation identification (name, location, CBAM registration reference); production process type; embedded-emissions figure in tCO₂ per tonne; reporting period; supporting emissions records; verification status and name of any accredited verifier; any carbon price paid in the country of origin; applicable free-allocation information; and specific product and CN-code mapping. Not every supplier will provide all nine at this stage. Where a gap exists, the importer should document the attempt, record the reason, and apply the applicable default from Implementing Regulation (EU) 2025/2621.

3.5 Carbon-Price Paid in the Country of Origin

• FINDING: The annual CBAM declaration incorporates applicable carbon-price deductions for costs already paid in the country of origin, as established in Articles 20–22 of Regulation (EU) 2023/956, giving importers a legitimate mechanism to reduce their CBAM certificate obligation where a foreign carbon price applies.

• SO WHAT: An importer that cannot document a carbon price already paid in the country of origin risks paying for those embedded emissions twice — once at source and once through EU CBAM certificates.

• NOW WHAT: Establish a separate evidence trail for any carbon cost paid on steel production outside the EU and retain it alongside the declaration file for every import covered by the 30 September 2027 deadline.

Carbon-price deductions reduce the certificate surrender obligation by the amount of any qualifying carbon cost the producer has already paid in its country of origin. The deduction mechanism applies where the importer can demonstrate, through documented evidence, that a carbon price attributable to the embedded emissions of the specific goods was paid to a non-EU authority. This is a direct financial benefit — a documented foreign carbon cost of €X per tonne of CO₂ reduces the corresponding CBAM certificate requirement by that amount.

Research limitation: The specific documentary requirements and calculation methodology for carbon-price deductions are established in the current implementing provisions of Regulation (EU) 2023/956. This report confirms the deduction principle but does not reproduce the specific methodology, because it must be verified against the current consolidated instrument at EUR-Lex. Compliance managers handling imports from countries with an operative carbon price should verify the exact deduction calculation and evidence requirements directly before the annual declaration.

3.6 Evidence and Audit Trail

• FINDING: Article 6 of Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083 requires the annual CBAM declaration to cover imported quantities, embedded emissions, applicable carbon-price deductions and the number of certificates to be surrendered, making the evidence trail the operational backbone of every compliant declaration.

• SO WHAT: A liability figure without a supporting evidence chain creates an audit-exposure risk that cannot be remedied after the 30 September 2027 declaration date.

• NOW WHAT: Create a documented CBAM evidence file structure — indexed by import line and reporting period — before 31 December 2026.

The evidence file for each CBAM-covered steel import line should contain nine document categories corresponding to the data chain in Table 5: the customs entry and product description; the CN-code-to-Annex-I mapping; the supplier installation record; the embedded-emissions figure with its basis (actual or default); the verification report where actual emissions are used; the carbon-price deduction evidence; the certificate exposure calculation; the certificate transaction records from the CBAM Registry; and the final reconciliation to the submitted annual declaration.

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4. Key Dates and Deadlines

4.1 2026–2027 EU CBAM Compliance Timeline

• FINDING: The EU CBAM compliance calendar for steel importers runs from 1 January 2026 through to 30 September 2027, with nine identifiable milestones — including two quarterly certificate-account tests on 31 March 2027 and 30 June 2027 that are independent of, and precede, the final declaration and surrender deadline.

• SO WHAT: An importer that maps only the September 2027 deadline is missing eight earlier compliance milestones, two of which carry independent financial consequences for the CBAM Registry account.

• NOW WHAT: Map all nine compliance milestones into the company’s regulatory calendar and assign a responsible owner to each before 31 December 2026.

The definitive regime operates through a sequence of obligations, each building on the last. Emissions data must be collected during 2026 before it can be declared in 2027. Certificates must be held in the CBAM Registry account before they can pass the 50% quarterly test. Both quarterly tests must be passed before the final surrender is made in September. Managing CBAM as a year-end exercise creates structural exposure at each prior milestone.

Table 6: 2026–2027 EU CBAM Compliance Timeline for Steel Importers

Date	Milestone	Obligation
1 Jan 2026	Definitive regime started	All definitive-regime obligations apply; certificate liability begins accumulating
13 Feb 2026	Default values published	Implementing Reg. (EU) 2025/2621 in force
23 Jun 2026	Actual vs default factsheet published	Commission guidance on actual/default decision
30 Jun 2026	Verification framework published	Accreditation information operationally available
6 Jul 2026	Q2 2026 certificate price published	€75.28/tCO₂ confirmed
1 Jan 2027	Weekly pricing begins; certificate purchasing opens	Certificates for 2026 imports can be purchased
31 Mar 2027	First quarterly 50% certificate-account test	Account must hold ≥50% of cumulative embedded emissions
30 Jun 2027	Second quarterly 50% certificate-account test	Account must hold ≥50% of cumulative embedded emissions
30 Sep 2027	First annual declaration and certificate surrender	All 2026 imports: declaration submitted; certificates surrendered

Note: UK CBAM enters into force on 1 January 2027 as a separate, distinct regime under Finance Act 2026, Part 5. Its first annual return and payment are due 31 May 2028. The two regimes are legally independent, operate different mechanisms — certificates versus tax — and are not equivalent in structure, obligations or thresholds.

4.2 Why 30 September 2027 Is Not the First Deadline

• FINDING: From 2027, the authorised CBAM declarant must ensure that the certificates in its CBAM Registry account at the end of each quarter correspond to at least 50% of the embedded emissions in goods imported since the beginning of that calendar year, under Regulation (EU) 2025/2083 amending Article 22(2) of Regulation (EU) 2023/956.

• SO WHAT: The quarterly 50% tests on 31 March 2027 and 30 June 2027 create independent certificate-account obligations and cash-management pressure months before the September 2027 surrender — an importer that has not planned for these tests faces two earlier compliance failures.

• NOW WHAT: Build quarterly certificate-account monitoring and procurement triggers into the 2027 compliance calendar before 1 January 2027.

The 50% quarterly requirement front-loads both the cash requirement and the compliance exposure. Certificate procurement for 2026 imports opens on 1 January 2027, coinciding with the start of the weekly pricing regime. The importer must therefore simultaneously begin purchasing certificates under the new weekly methodology and ensure that the 31 March account test is met. Both obligations commence on the same date.

Failure to meet the quarterly threshold is not a warning — it is a breach. The compliance team that models only the September deadline and defers certificate procurement to Q3 2027 faces two prior breaches that are already facts before the final deadline arrives.

4.3 2026 vs 2027 Certificate Pricing

• FINDING: Commission Implementing Regulation (EU) 2025/2548 establishes that CBAM certificate prices will be calculated as quarterly averages in 2026 and as weekly averages from 1 January 2027 — the year in which the importer must simultaneously build quarterly certificate holdings and prepare for the 30 September 2027 surrender.

• SO WHAT: The finance function’s 2026 exposure model — based on four official quarterly price publications — will not be adequate for 2027, when the model must handle a continuous weekly price series alongside two prior quarterly compliance tests.

• NOW WHAT: Build a 2027 weekly-price monitoring process, and separate it from the 2026 quarterly model, before 1 January 2027.

In 2026, certificate prices are official Commission publications issued quarterly. The Q1 and Q2 2026 prices are already published and allow a relatively straightforward exposure calculation once the embedded-emissions inputs are established. From 1 January 2027, the pricing methodology changes to weekly averages under Implementing Regulation (EU) 2025/2548. This has two consequences for the finance function: certificate procurement decisions become continuous rather than periodic, and the financial reporting for quarterly 50% tests will require a blended average based on import volume and purchase prices over the quarter — not a single quarterly rate. Both require a different operational model from 2026.

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5. Financial Exposure and Risk

5.1 How CBAM Certificate Exposure Is Calculated

• FINDING: The EU CBAM certificate exposure formula is: embedded emissions (tCO₂) × applicable certificate price − eligible carbon-price deduction − applicable free-allocation adjustment, with the Q2 2026 official price confirmed at €75.28/tCO₂ and product-specific embedded emissions as the critical variable that determines the actual financial liability.

• SO WHAT: A compliance team that does not establish product-level embedded-emissions data cannot calculate a defensible financial exposure figure, regardless of how accurately it tracks the certificate price.

• NOW WHAT: Calculate certificate exposure at product and installation level for each significant steel import line, using verified or applicable default emissions, before the 30 September 2027 declaration.

  
  

Table 8: CBAM Financial Exposure Formula

Component	Source	Note
Embedded emissions (tCO₂)	Supplier actual data or Implementing Reg. 2025/2621 default	Per product and installation; product-specific
Applicable certificate price (€/tCO₂)	European Commission quarterly (2026) or weekly (from 2027)	Q1 2026: €75.36; Q2 2026: €75.28
Carbon-price deduction (€)	Evidence of carbon cost paid in country of origin	Requires documentation; verify methodology at EUR-Lex
Free-allocation adjustment	Applicable EU ETS free allocation for the installation	Where relevant and documented
= Certificate exposure (€)	Calculation output	Must reconcile to certificate surrender by 30 Sep 2027

The exposure calculation accumulates with every CBAM-covered steel import throughout the year. Managing it as a single year-end calculation creates both financial forecasting risk and the likelihood of failing the quarterly 50% tests — because the certificate obligation builds continuously, while a year-end approach defers procurement to a point at which both quarterly tests are already obligations.

5.2 2026 CBAM Certificate Price Exposure

• FINDING: The European Commission published Q1 2026 CBAM certificate prices at €75.36/tCO₂ and Q2 2026 at €75.28/tCO₂, with Q3 and Q4 2026 prices not yet published as of 13 August 2026.

• SO WHAT: Two verified price inputs are available for 2026 exposure modelling; extrapolating beyond these two quarters introduces forecasting uncertainty that could materially affect the accuracy of any financial exposure estimate.

• NOW WHAT: Update the 2026 exposure model with each quarterly price as the Commission publishes it, and do not use estimates for unpublished quarters, before finalising the annual exposure model for the 30 September 2027 declaration.

Table 7: 2026 CBAM Certificate Prices (Official European Commission)

Quarter	Official Price
Q1 2026	€75.36/tCO₂
Q2 2026	€75.28/tCO₂
Q3 2026	Not yet published (as of 13 August 2026)
Q4 2026	Not yet published
From 2027	Weekly price under Implementing Reg. (EU) 2025/2548

The Q1 and Q2 prices establish a reference range for 2026 exposure modelling but must not be extrapolated to cover unpublished quarters. The certificate price is set by reference to EU ETS auction prices, which can move. Using Q2 data as a proxy for all four quarters would introduce a forecasting error that, depending on EU ETS price movements, could be material in either direction.

5.3 Why “CBAM Cost per Tonne of Steel” Is the Wrong Metric

• FINDING: No authoritative universal embedded-emissions intensity figure for steel as a category exists in the research data underlying this report, confirmed by the Commission’s position that embedded emissions are product-, installation- and production-route-specific.

• SO WHAT: Any headline stating a single CBAM cost per tonne of steel — from a trade publication, consultancy or competitor report — applies an assumption that may be materially wrong for any specific importer’s product portfolio.

• NOW WHAT: Report CBAM exposure only at product and installation level, using inputs traceable to verified actual emissions or the applicable default from Implementing Regulation (EU) 2025/2621 at EUR-Lex, for all declarations submitted by 30 September 2027.

Three variables prevent a universal steel figure from being defensible.

• First, product variation: a structural steel section and a stainless steel flat product are produced through different processes and carry different embedded-emissions intensities.

• Second, production route: electric arc furnace production has a substantially different embedded-emissions profile from basic oxygen furnace production, particularly where low-carbon electricity is available.

• Third, deduction variation: a supplier in a country with an operative carbon price generates a deductible amount that differs from a supplier in a country without one.

A generic “€X per tonne of steel” figure cannot be defended in a compliance audit and should not be used as the basis for financial planning or certificate procurement. The defensibility of a CBAM exposure calculation depends on every input — product, installation, production route, certificate price, eligible deductions — being traced to a verifiable source.

5.4 Penalty Exposure

• FINDING: Article 26 of Regulation (EU) 2023/956 links the penalty for failing to surrender the required certificates to the EU ETS excess-emissions penalty, with non-authorised importers breaching their obligations facing a penalty of three to five times that rate.

• SO WHAT: Certificate-account management is not a budgeting inconvenience — it carries a financial penalty with an upward multiplier for each certificate not surrendered, creating disproportionate consequences for importers that treat quarterly tests as advisory.

• NOW WHAT: Establish escalation controls before every quarterly 50% test and before the final surrender on 30 September 2027, with a defined response protocol for any account shortfall.

The Article 26 penalty structure operates as a multiplier applied to each certificate not surrendered by the deadline. An importer that misses the 30 September 2027 surrender with a material shortfall does not face a single fixed administrative fine — it faces the EU ETS excess-emissions penalty multiplied by the number of missing certificates, with a further factor of three to five for non-authorised importers. The financial exposure scales directly with the size of the shortfall.

Research limitation: The exact euro amount of the applicable EU ETS excess-emissions penalty as currently in force — and therefore the base from which the Article 26 CBAM penalty is calculated — is not reproduced in this report. Importers undertaking financial risk assessment should source the current penalty rate directly from the consolidated text of Regulation (EU) 2023/956, Article 26, at EUR-Lex and verify it is the current operative rate before including it in any financial model.

The three-to-five times multiplier for non-authorised importers makes authorisation status a directly financial — not merely procedural — compliance category. An importer importing CBAM-covered steel without authorisation faces enhanced penalties on top of the base certificate shortfall calculation.

5.5 Financial Risk Matrix

• FINDING: Three primary variables drive CBAM financial exposure for steel importers: embedded-emissions data quality, certificate-account holdings against the 50% quarterly threshold, and carbon-price deduction evidence — each requiring a distinct, owned internal control.

• SO WHAT: CBAM financial risk is a chain of interconnected controls rather than a single calculation; a failure in any one control propagates into the declaration and the certificate obligation.

• NOW WHAT: Assign a named internal owner to each control point in Table 9 before 1 January 2027.

Table 9: Financial Risk Matrix

Risk	Operational Consequence	Financial Exposure	Required Control
Actual emissions not verified	Reversion to default values; higher certificate liability	Potential over-spend on certificates	Supplier verification checklist; accredited verifier engagement
Default values incorrect or superseded	Declaration error; compliance exposure	Penalty risk if material	Annual check against current Implementing Reg. 2025/2621 at EUR-Lex
Certificate account below 50% at quarterly test	Compliance breach on 31 Mar or 30 Jun 2027	Penalty under Article 26	Quarterly monitoring with procurement trigger
Carbon-price deduction undocumented	Certificate exposure overstated; CBAM overpayment	Financial loss; no retrospective remedy	Separate evidence trail per import line
Annual declaration incomplete or inaccurate	Potential certificate shortfall penalty	Article 26 penalty × shortfall	Pre-declaration reconciliation review by 30 Jun 2027
Authorisation lapsed or not in place	Import becomes non-compliant	Enhanced penalty multiplier (3–5×)	Authorisation status monitoring; annual renewal check

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6. Sector-Specific Impact Analysis

6.1 Steel: The Core Compliance Exposure

• FINDING: The Commission maintains dedicated iron-and-steel sector guidance confirming that steel’s embedded-emissions calculations under the definitive regime depend on production route, actual versus default values and verification requirements, with the Q2 2026 certificate price at €75.28/tCO₂ applying to every verified tonne of CO₂ embedded in covered steel imports.

• SO WHAT: Steel cannot be treated as a single homogeneous emissions category — a basic oxygen furnace route and an electric arc furnace route produce materially different embedded-emissions profiles, making a single CBAM exposure assumption across a mixed portfolio inaccurate.

• NOW WHAT: Segment supplier and product exposure by production route and installation before the 30 September 2027 declaration.

EU CBAM for iron and steel is assessed on the basis of direct emissions from the production process, not indirect electricity emissions. The electricity consumed in electric arc furnace production is not itself a CBAM-embedded emission for steel — an important technical boundary that distinguishes steel from aluminium and from other sectors with indirect-emission components. Applying aluminium guidance to a steel calculation produces an incorrect liability figure.

The two principal production routes relevant to CBAM embedded emissions for steel are the integrated blast furnace and basic oxygen furnace (BF-BOF) route — iron ore and coke based, typically with higher embedded emissions per tonne — and the electric arc furnace (EAF) route, using recycled scrap steel, typically with lower embedded emissions per tonne particularly where low-carbon electricity is available. A steel import portfolio spanning both routes requires separate emissions treatment for each supplying installation.

Table 10: Steel Production-Route Data Framework

Production Route	Primary Input	Typical Emission Profile	Data Source	Verification Requirement
BF-BOF (blast furnace / basic oxygen furnace)	Iron ore, coke	Higher embedded CO₂/t	Actual (supplier) or applicable default from Implementing Reg. 2025/2621	Required for actual emissions
EAF (electric arc furnace)	Scrap steel	Lower embedded CO₂/t (electricity source-dependent)	Actual (supplier) or applicable default from Implementing Reg. 2025/2621	Required for actual emissions
Other or mixed routes	Variable	Supplier-specific	Actual or applicable default	Required for actual emissions

Note: Specific default-value figures for each production route are established in Implementing Regulation (EU) 2025/2621 and must be sourced from the current EUR-Lex consolidated text before any calculation.

6.2 Steel vs Other CBAM Sectors

• FINDING: EU CBAM covers six sectors under the definitive regime — iron and steel, aluminium, cement, fertilisers, hydrogen and electricity — each governed by different embedded-emissions methodologies confirmed by the European Commission’s sector guidance.

• SO WHAT: Compliance guidance, default values and methodology developed for other CBAM sectors cannot be applied to steel without explicit verification against the steel-specific provisions in Regulation (EU) 2023/956 and Implementing Regulation (EU) 2025/2621.

• NOW WHAT: Use only steel-specific guidance from Regulation (EU) 2023/956 Annex I and Commission Implementing Regulation (EU) 2025/2621 for all steel import calculations, and confirm this is the operative version before 31 December 2026.

Table 14: Steel vs Other EU CBAM Sectors

Sector	Basis of Embedded Emissions	Key Distinction from Steel
Iron and steel	Direct emissions from production process	This report’s primary subject; direct emissions only
Aluminium	Calculations differ from steel; verify against aluminium-specific Commission guidance	Do not apply steel methodology to aluminium; separate sector guidance applies
Cement	Direct emissions; sector-specific methodology	Methodology differs from steel; verify against cement-specific Commission guidance
Fertilisers	Direct emissions; sector-specific methodology	Methodology differs from steel; verify against fertiliser-specific Commission guidance
Hydrogen	Direct emissions from production	Sector-specific Commission guidance applies
Electricity	Grid-level emissions intensity	Non-manufactured; methodology distinct from all goods sectors

The cross-sector comparison serves one purpose for the steel importer: it confirms that steel operates under its own methodology, not a generic CBAM framework applicable to all goods. Guidance produced for aluminium or other sectors may reference different embedded-emissions boundaries and should not be applied to steel without explicit verification against the steel-specific provisions.

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7. Case Studies: What Steel Producers Are Already Doing

7.1 JSW Steel — India

• FINDING: JSW Steel’s 2024–25 Integrated Report discloses that the company identified products exported to the EU from each plant, mapped production processes and calculated emissions in accordance with EU CBAM guidance, and initiated quarterly submissions to EU importers — with Indian operations exporting 2.08 Mt and generating export turnover of ₹13,190 crore in FY2024–25.

• SO WHAT: A major Indian steel exporter has built a product-plant-process level CBAM data architecture, meaning EU importers sourcing from JSW Steel can expect structured, CBAM-specific data outputs that may support actual-emissions declarations.

• NOW WHAT: Treat CBAM data readiness as part of supplier procurement due diligence for all steel suppliers above the 50-tonne threshold.

JSW Steel’s CBAM preparation is the strongest available real-world example of an Indian producer building the data architecture required by the EU CBAM definitive regime. The company’s disclosure describes a structured installation-level process: product identification by plant, production-process mapping, emissions calculation per CBAM guidance, and quarterly submissions to EU importers. This is exactly the supplier-side infrastructure that enables an EU importer to use actual emissions rather than default values.

The EU-specific volume within JSW’s 2.08 Mt Indian exports is not separately disclosed in the FY2024–25 report. The implication for EU importers is direct regardless: a supplier with this infrastructure is a compliance asset. A supplier without it forces the importer to default values — with the potential consequence of a higher certificate exposure than verified actual emissions would have required. Supplier CBAM data readiness should be assessed in sourcing decisions, not treated as a post-purchase administrative concern.

7.2 Tata Steel

• FINDING: Tata Steel’s 2024–25 Integrated Report explicitly identifies EU CBAM as a regulatory driver and discloses the development of branded low-emission steel offerings — Optemis® and Zeremis® Carbon Lite — for the European market, with Indian crude steel production of 21.75 Mt and deliveries of 20.94 Mt in FY2024–25.

• SO WHAT: CBAM is beginning to shape product strategy at major steel producers — creating commercial differentiation between high- and low-emission steel, not merely an administrative compliance requirement.

• NOW WHAT: Compliance teams should coordinate with procurement and commercial functions to capture the product-differentiation implications of CBAM before 1 January 2027, treating it as a commercial as well as a compliance issue.

Tata Steel’s FY2024–25 disclosure establishes that CBAM compliance data has moved from a reporting obligation to a commercial differentiator. The company’s Optemis® and Zeremis® Carbon Lite products are positioned for European buyers where verified lower emissions translate directly into reduced CBAM certificate exposure. For EU importers, lower-emission steel from suppliers actively managing their carbon profile may carry verified actual-emissions data that directly reduces the certificate obligation.

The EU-specific volume of Indian Tata Steel exports is not separately disclosed in the FY2024–25 material reviewed. The company’s explicit CBAM positioning is nonetheless a relevant indicator of the direction in which supply-chain compliance is moving for a major producer with significant European presence.

7.3 Tata Steel Nederland

• FINDING: Tata Steel Nederland’s FY2025–26 annual report states that selling prices benefited from higher-priced import offers “mainly because of the EU Carbon Border Adjustment Mechanism (CBAM)”, which came into effect on 1 January 2026, with the company reporting liquid steel production of 6.7 Mt, deliveries of 6.1 Mt and revenue of €6.028bn for FY2025–26.

• SO WHAT: CBAM is already influencing competitive market pricing for EU steel — the certificate cost embedded in imports is being reflected in market prices, creating commercial consequences for all market participants beyond administrative obligations.

• NOW WHAT: Include CBAM exposure in commercial pricing assessments and supply-chain reviews as well as compliance filings before 1 January 2027, when the UK regime also enters into force.

Tata Steel Nederland’s disclosure provides market-level evidence that CBAM’s effect on steel pricing is not theoretical: it has been cited by an EU steel producer as a factor in its FY2025–26 pricing environment. The compliance cost an importer incurs through certificate purchases is the same cost that, when reflected in import pricing, changes the competitive dynamics of the EU steel market.

ArcelorMittal’s estimate that combined trade policy and CBAM could reduce EU flat and long-product imports by approximately 10 Mt relative to 2024 levels reinforces that major producers are already incorporating CBAM’s market impact into strategic planning. This is a company estimate, not an official EU projection, and should be read as such.

Table 13: Indian Steel CBAM Case Studies — Summary

Producer	CBAM Action Disclosed	Key Verified Figure	Implication for EU Importer
JSW Steel	Plant-product mapping, emissions calculation, quarterly submissions to EU importers	2.08 Mt Indian exports (FY2024–25)	Structured actual-emissions data available; use to support actual vs default decision
Tata Steel	Low-emission product development (Optemis®, Zeremis® Carbon Lite); CBAM identified as regulatory driver	21.75 Mt India production (FY2024–25)	CBAM driving commercial product differentiation; coordinate compliance and commercial functions
Tata Steel Nederland	Pricing benefit attributed to CBAM from 1 Jan 2026	€6.028bn revenue; 6.7 Mt production (FY2025–26)	CBAM already influencing EU steel market pricing; treat as commercial as well as compliance issue

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8. Practical Action Framework

8.1 The 10-Step Steel Importer CBAM Readiness Model

• FINDING: The 10-step readiness model covers the compliance chain from import scope determination through to annual declaration, with the 30 September 2027 annual surrender as the terminal deadline and the 31 March 2027 quarterly 50% test as the first mandatory milestone.

• SO WHAT: Each step in the chain has a defined output that enables the next; a gap in any single step prevents the subsequent step from being completed accurately or on time.

• NOW WHAT: Begin the readiness model at Step 1 immediately, complete Steps 1–7 (data chain) before 31 December 2026, and complete Steps 8–10 (certificates and declaration) by 30 June 2027 at the latest.

The readiness model converts the compliance obligations in Section 3 into a sequential implementation sequence. Each step has a defined output that enables the next step.

1. Map CBAM-covered imports. Identify every steel product in the import portfolio and confirm whether its CN code appears in Annex I of Regulation (EU) 2023/956 as amended. Output: a complete in-scope/out-of-scope product inventory.

2. Validate CN codes. Confirm the Annex I classification for each in-scope product against the current consolidated text at EUR-Lex. Do not rely on transitional-period determinations without re-verification. Output: a documented, source-confirmed CN-code mapping.

3. Confirm 50-tonne threshold. Calculate annual import volumes for all CBAM-scope steel products. Confirm whether the aggregate exceeds 50 tonnes. Output: documented annual CBAM-covered import volume.

4. Confirm authorised declarant status. Verify that the company holds valid authorised CBAM declarant status under Implementing Regulation (EU) 2025/486 as amended by Implementing Regulation (EU) 2025/2549. If not, initiate the application immediately. Output: confirmed authorisation status with documented ownership.

5. Map every supplier and installation. For each CBAM-covered steel product, identify the supplying installation by name, location and production process type. Output: a complete supplier-installation map.

6. Obtain emissions data. Issue the standardised supplier data request (Table 11) to every installation identified in Step 5. Record receipt and assess data quality. Output: completed supplier data returns, with gaps documented.

7. Decide actual vs default. For each installation, apply the Actual vs Default Decision Matrix (Table 4). Where verified actual data is available, plan for accredited verification. Where it is not, apply the applicable default from Implementing Regulation (EU) 2025/2621. Output: documented actual/default decision per installation.

8. Calculate certificate exposure. Apply the formula from Table 8 to each import line: embedded emissions × applicable quarterly certificate price − eligible carbon-price deductions − applicable adjustments. Sum by quarter. Output: a product-level, quarterly exposure model.

9. Build quarterly 50% certificate controls. Set up CBAM Registry account monitoring with procurement triggers at 31 March, 30 June and 30 September 2027. Define the certificate procurement workflow for the weekly-pricing environment from 1 January 2027. Output: a 2027 certificate-account management process.

10. Complete 2027 declaration readiness review. By 30 June 2027 at the latest, run the readiness test in Table 15 against all ten criteria. Resolve any shortfall before 30 September 2027. Output: a confirmed-ready annual declaration package.

8.2 Supplier CBAM Data Request Checklist

• FINDING: The Commission’s 30 June 2026 verification framework confirms that actual emissions submitted in the annual declaration must be capable of supporting accredited verification, meaning an informal supplier declaration may be insufficient to support an actual-emissions claim in the 30 September 2027 annual declaration.

• SO WHAT: A supplier data request that does not specify the required evidence categories creates a compliance gap that defaults the importer to statutory default values, regardless of how low the supplier’s actual emissions may be.

• NOW WHAT: Issue a standardised CBAM supplier data pack request to every CBAM-relevant steel supplier by 31 December 2026.

Table 11: Minimum CBAM Data Pack for a Steel Supplier

Data Category	Required Information	Notes
Product identification	Product name, CN code	Must match Annex I classification
Installation identification	Name, location, CBAM registration reference	EU-registered installations preferred
Production process	Process type (BF-BOF, EAF, other); relevant precursors	Determines embedded-emissions boundary
Embedded emissions	tCO₂ per tonne of product; state whether actual or applicable default	Actual values require accredited verification
Reporting period	Calendar year 2026 (January–December)	Must correspond to import dates
Verification status	Name of accredited verifier; verification report reference	Required for actual-emissions declarations
Carbon-price paid	Any carbon cost paid in country of origin; documentary evidence	Enables CBAM deduction calculation
Supporting records	Production records, fuel/energy inputs, emission factor sources	Required for verification
Free-allocation information	Where applicable to the installation	May affect deduction calculation

8.3 Internal CBAM Control Matrix

• FINDING: The annual CBAM declaration and certificate surrender due 30 September 2027 requires a chain of at least nine internal controls — from import scope determination through to certificate-account reconciliation — each requiring an identified owner and evidence output.

• SO WHAT: An unowned control point creates a silent compliance failure that may not surface until the declaration stage, at which point remediation may be impossible within the time available.

• NOW WHAT: Assign a named owner and quarterly review cycle to every control point in Table 12 before 1 January 2027.

Table 12: Internal CBAM Control Matrix

Control Point	Owner	Frequency	Evidence Output	Escalation Trigger
Scope determination (CN-code mapping)	Trade Compliance	Annual + on new product addition	Documented CN-to-Annex-I mapping	New product line imported
Authorisation status	Compliance Manager	Annual	CBAM Registry confirmation	Approaching expiry or entity change
Supplier data collection	Procurement / Compliance	Q4 each year	Completed supplier data packs per Table 11	Non-response after two requests
Actual vs default decision	Compliance Manager	Per installation	Decision Matrix per Table 4	Supplier data gap or quality failure
Verifier engagement	Compliance Manager	Annual (before Q4)	Verification engagement letter	Actual emissions declared for any installation
Certificate exposure calculation	Finance / Compliance	Quarterly	Quarterly exposure model	Commission publishes new certificate price
Certificate procurement	Treasury / Finance	Monthly from 1 Jan 2027	CBAM Registry account records	Account approaches 50% threshold
Quarterly 50% test	Compliance Manager / Finance	31 Mar, 30 Jun, 30 Sep 2027	Registry account snapshot at each quarter-end	Account balance below 50% of cumulative exposure
Declaration preparation	Compliance Manager	Q3 2027 (latest start)	Draft annual declaration	Data gaps or calculation conflicts

8.4 The 30 September 2027 Readiness Test

• FINDING: The first annual CBAM declaration and certificate surrender for goods imported during 2026 is due 30 September 2027, covering all CBAM-covered steel imports from 1 January 2026 and requiring a complete data chain, verified emissions, accurate calculations and sufficient certificates in the CBAM Registry account.

• SO WHAT: Missing data at the declaration stage cannot be remedied without either delaying submission — creating penalty exposure — or substituting default values for previously planned actual-emissions figures.

• NOW WHAT: Run the readiness test in Table 15 no later than 30 June 2027 to allow three months for gap remediation before the surrender deadline.

Table 15: 30 September 2027 Readiness Test

Item	Confirmed?	Action if No
All CBAM-covered steel imports for 2026 identified and recorded	Yes / No	Return to Step 1 of readiness model
CN-code-to-Annex-I mapping confirmed for all in-scope products	Yes / No	Verify against current consolidated Annex I at EUR-Lex
Authorised CBAM declarant status confirmed and valid	Yes / No	Apply or renew immediately
Annual CBAM-covered import volume confirmed against 50-tonne threshold	Yes / No	Reconcile against customs records
Embedded-emissions data obtained from every supplier installation	Yes / No	Apply default values; document gap and reason
Actual emissions verified by accredited verifier where used	Yes / No	Obtain verification report or revert to default values
Default values sourced from current Implementing Reg. 2025/2621 where applicable	Yes / No	Verify against EUR-Lex consolidated text
Carbon-price deduction evidence retained where applicable	Yes / No	Obtain evidence from supplier or importing records
Certificate exposure calculation reconciled to surrender obligation	Yes / No	Recalculate using verified inputs
Sufficient certificates held in CBAM Registry account	Yes / No	Procure certificates immediately

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9. Strategic Outlook: 2026–2027

9.1 From Quarterly to Weekly Certificate Pricing

• FINDING: Commission Implementing Regulation (EU) 2025/2548 establishes that CBAM certificate prices will move from quarterly averages in 2026 to weekly averages from 1 January 2027 — the date on which certificate purchasing for 2026 imports opens and the quarterly 50% account tests begin.

• SO WHAT: The finance function’s CBAM forecasting model must handle a continuous weekly price series in 2027, creating greater complexity in treasury management, procurement timing and quarterly financial reporting compared with the four-point 2026 model.

• NOW WHAT: Build a 2027 weekly-price monitoring process and separate it from the 2026 quarterly exposure model before 1 January 2027.

The practical consequence of weekly pricing is not simply more frequent data: it is a more active procurement environment. In 2026, four official price points allow a relatively straightforward exposure calculation. In 2027, deferring certificate procurement creates both price uncertainty and the risk of failing the 31 March and 30 June 50% tests. Weekly pricing creates an incentive for earlier, more continuous certificate management and raises the complexity of the blended-average calculation required for each quarterly compliance test.

9.2 The 2027 Compliance-Control Shift

• FINDING: From 2027, the 50% quarterly certificate-account requirement under Regulation (EU) 2025/2083 generates independent compliance tests at 31 March, 30 June and 30 September 2027, making EU CBAM an ongoing treasury and compliance process rather than a single annual reporting exercise.

• SO WHAT: Any importer that has modelled its compliance programme around a single annual declaration has a structural control gap from the first quarter of 2027.

• NOW WHAT: Integrate quarterly CBAM certificate-account reviews into existing quarterly finance and compliance processes before 1 January 2027.

The 2027 shift is architectural. In 2026, the importer’s primary obligation is data collection — building the evidence chain, obtaining supplier data and tracking quarterly certificate prices. There is no certificate-account test in 2026. From 1 January 2027, the compliance architecture changes: the importer must simultaneously begin purchasing certificates under weekly pricing, pass two quarterly 50% tests, maintain the evidence chain for ongoing 2027 imports, and prepare the 30 September 2027 annual declaration for 2026 imports. All of these obligations are concurrent. The single-deadline model cannot accommodate them.

9.3 Supplier Data Will Become a Strategic Procurement Issue

• FINDING: JSW Steel’s disclosed CBAM preparation — identifying EU-bound products, mapping production processes and initiating quarterly data submissions to EU importers — confirms that 2.08 Mt of Indian steel exports are already being processed through a structured CBAM data architecture, signalling that supplier data readiness is becoming a differentiating factor in sourcing decisions.

• SO WHAT: An importer sourcing from a CBAM-ready supplier gains access to verified actual-emissions data that may reduce its certificate exposure relative to an importer using statutory default values — creating a direct cost incentive to prioritise CBAM-ready suppliers.

• NOW WHAT: Add CBAM emissions-data requirements to supplier qualification and contracting processes before 1 January 2027.

Major Indian steel exporters have begun building CBAM data infrastructure because the regulatory obligation creates commercial incentive for producers aiming to retain EU market access. Tata Steel’s development of low-emission branded products confirms the same dynamic: CBAM compliance data is becoming a commercial differentiator in the supply chain, not merely a compliance input. A procurement team that treats CBAM emissions data as a compliance department responsibility rather than a procurement specification will find itself relying on default values while competitors negotiate for verified actual-emissions data from the same supplier pool.

The compliance manager who embeds CBAM emissions-data requirements into supplier qualification and contracts before 1 January 2027 determines both the quality of the 30 September 2027 declaration and the size of the certificate obligation it carries. Every quarter of delay after that date is a quarter in which the importer cedes control of its CBAM cost to supplier data availability rather than its own compliance processes.

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10. FAQ Section

What must a steel importer do for EU CBAM in 2026?

A steel importer must confirm whether its products fall within Annex I of Regulation (EU) 2023/956 by CN code, verify that annual import volume exceeds the 50-tonne threshold, confirm valid authorised CBAM declarant status, and build a supplier-level embedded-emissions data chain covering all 2026 imports. The financial obligation — certificate purchase and surrender — does not begin until 2027, but the data determining the size of that obligation must be collected during 2026. Missing data at the end of 2026 cannot be remedied before the 30 September 2027 deadline without reverting to statutory default values.

What happens if my steel supplier cannot provide verified actual emissions?

The importer must apply the legally defined default values established in Commission Implementing Regulation (EU) 2025/2621 for the production route of the relevant installation. Default values are legally compliant but may be higher than actual emissions for efficient production routes, meaning the certificate exposure under default values may exceed what verified actual emissions would have required. The importer should document the supplier’s inability to provide data and the resulting default-value decision as part of its compliance evidence file.

How much will EU CBAM cost per tonne of imported steel?

No universal CBAM cost per tonne of steel can be stated because the liability depends on the specific product, the production route of the supplying installation, the applicable embedded-emissions figure (actual or default), the quarterly certificate price and any eligible carbon-price deductions. The verified Q2 2026 certificate price is €75.28/tCO₂. Certificate exposure for a specific import line is calculated by multiplying the embedded emissions for that product in tCO₂ per tonne by the applicable certificate price, then adjusting for eligible deductions. The embedded-emissions figure — not the certificate price — is the variable that makes every calculation product-specific.

What is the 50% CBAM certificate requirement from 2027?

From 2027, the authorised CBAM declarant must ensure its CBAM Registry account holds certificates equivalent to at least 50% of cumulative embedded emissions from all CBAM-covered imports since the start of the calendar year, tested at each quarter-end. The first test is 31 March 2027, the second is 30 June 2027 and the final annual surrender is 30 September 2027. Failure to meet the quarterly threshold is a breach of Regulation (EU) 2025/2083 amending Article 22(2) of Regulation (EU) 2023/956, not a warning. Certificate purchasing for 2026 imports opens on 1 January 2027, coinciding with the start of the weekly pricing regime.

What is the EU CBAM deadline for 2026 steel imports?

The first annual CBAM declaration and certificate surrender for all goods imported during 2026 must be submitted by 30 September 2027, covering every tonne of CBAM-covered steel imported from 1 January 2026 onward. However, 30 September 2027 is not the first compliance date. The quarterly 50% certificate-account tests on 31 March 2027 and 30 June 2027 are earlier, independent obligations under Regulation (EU) 2025/2083. An importer that treats September 2027 as the first CBAM deadline has already missed two prior compliance tests.

What evidence should a steel importer keep for its CBAM declaration?

The CBAM evidence file for each import line should contain nine document categories: the customs entry and product description; the CN-code-to-Annex-I mapping; the supplier installation record including production process type; the embedded-emissions figure with its basis (actual or default); the verification report where actual emissions are used; the carbon-price deduction evidence where applicable; the certificate exposure calculation; the CBAM Registry certificate transaction records; and the final reconciliation to the submitted annual declaration. These categories correspond to the evidence chain in Table 5 and the control matrix in Table 12.

11. References and Sources

Tier 1 — Binding EU Sources

● European Parliament & Council | Regulation (EU) 2023/956 establishing CBAM | 10 May 2023 | EUR-Lex (consolidated and amended text)

● European Parliament & Council | Regulation (EU) 2025/2083 — amending and strengthening CBAM | 8 Oct 2025 | EUR-Lex

● European Commission | Commission Implementing Regulation (EU) 2025/486 — authorised CBAM declarant | EUR-Lex

● European Commission | Commission Implementing Regulation (EU) 2025/2549 — amending Reg. 2025/486 | EUR-Lex

● European Commission | Commission Implementing Regulation (EU) 2025/2621 — definitive default values | 13 Feb 2026 | EUR-Lex

● European Commission | Commission Implementing Regulation (EU) 2025/2548 — certificate pricing methodology | 10 Dec 2025 | EUR-Lex

● European Commission | CBAM Definitive Regime | 2026 | taxation-customs.ec.europa.eu

● European Commission | Price of CBAM Certificates | 2026 | taxation-customs.ec.europa.eu

● European Commission | Actual vs Default Values Factsheet | 23 Jun 2026 | taxation-customs.ec.europa.eu

● European Commission | Verification and Accreditation Framework | 30 Jun 2026 | taxation-customs.ec.europa.eu

Tier 2 — Official Third-Country Evidence

● Government of India, Ministry of Steel | Lok Sabha Question 3980 — CBAM and Indian steel exports to EU | 25 Mar 2025

● Government of India, Ministry of Commerce & Industry | Rajya Sabha Question 857 — CBAM verifier accreditation | 6 Feb 2026

● JSW Steel | Integrated Report 2024–25 (including CBAM risk management disclosure) | 2025

● Tata Steel | Integrated Report & Accounts 2024–25 — Climate Change | 2025

● Tata Steel Nederland | Annual Report 2025/26 | 2026

Tier 3 — Market/Industry Evidence

● ArcelorMittal | Q4 2025 Sustainability Presentation | Feb 2026

● World Steel Association | World Steel in Figures 2026 | 2026

UK Regime Comparator Sources

● UK Parliament | Finance Act 2026, Part 5 — UK CBAM | 2026 | legislation.gov.uk

● HMRC / HM Treasury | CBAM Policy Summary | Updated 16 Jul 2026 | GOV.UK

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Scope and Disclaimer

This report is produced by CBAM Journal, operated by Sekason Research Limited (Company No. 14339910), London, for informational and intelligence purposes only. It does not constitute legal, financial, investment, engineering or safety-certification advice and should not be relied upon as such. Named companies and their figures are cited as disclosed in their own public documents and are presented as company-claimed information, not independently verified by Sekason Research Limited. No endorsement of any named company is implied. Readers should seek independent professional advice before making compliance, financial or commercial decisions based on this report. Sekason Research Limited accepts no liability for decisions made in reliance on this report’s content. Full terms and conditions are available at cbamjournal.com.