EU CBAM DEFINITIVE PERIOD • 1 JANUARY 2026 ONWARDS
CBAM Compliance & Strategy Guide for Iron & Steel Exporters
An operational manual for IMMIB and Turkish Metals members on authorisation, verification, pricing, reporting and decarbonisation under Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083
This guidance has been created by Mining, Metals and Materials Markets, an international consulting practice specialised on CBAM compliance, decarbonization, carbon trading and risk management.
The guidance and calculations presented in this document are based on a representative, hypothetical Turkish steel exporter and focus on a single product category. While this scenario is designed to illustrate the general CBAM methodology, calculation structures, and compliance processes, the specific inputs, emission factors, and supply chain dynamics must be tailored to match the unique operational reality of each individual company.
Example Company Profile
- Exporter: Turkish hot-rolled steel producer.
- Precursor: Slabs purchased from Malaysia (CN 7207).
- Final Product: Flat-rolled ≥600mm, hot-rolled sheets (CN 7208).
- Destination: Exported to the EU via an EU-based importer.
- Campaign Volume: 10,000 tonnes of hot-rolled sheets.
- Fuel Used: Natural Gas.
- Yield Loss / Material Consumption Factor (MCF): 95% yield (requires 10,526.3t of slabs to produce 10,000 tonnes of sheets).
Operational Tasks & Calculation
Authorisation, EORI & the CBAM Registry
- Who must apply? The EU importer or its indirect customs representative within the EU must obtain authorised CBAM declarant status.
- Can Turkish exporters apply directly? No. Turkish exporters cannot apply directly. They must ensure their EU customer (or the customer’s indirect representative) is authorised.
- Liability: The importer may delegate the technical submission of the declaration to a third-party service provider, but legal liability remains entirely with the authorised declarant.
Calculation of the emissions
To calculate the CBAM embedded emissions for a hot-rolled steel producer in Turkey producing flat-rolled sheets (CN code 7208) using slabs purchased from Malaysia (CN code 7207), we must treat the flat-rolled sheets as a complex good under the EU CBAM regulation.
Under the CBAM methodology, the embedded emissions of a complex good must include both the direct emissions (Scope 1) of the rolling process and the embedded emissions (Scope 1 and 2) of the precursor (the slabs).
Calculate Direct Scope 1 Emissions of the Turkish Rolling Mill
In a hot-rolling mill, the primary source of Scope 1 (direct) emissions is the combustion of fuel (we assume natural gas) in the reheating furnace to heat the slabs to rolling temperature.
We assume the reheating furnace consumes 1.50 GJ of natural gas per tonne of rolled steel produced.
- Total Energy Consumed: 10,000 * 1.50GJ = 15,000 GJ
- Natural Gas Emission Factor: Standard IPCC default value of 0.0561 tonne CO2 /GJ
- Direct Emissions from Combustion 15,000 * 0.0561 = 841.5 tCO2
Calculate the Embedded Emissions of the Precursor Slab
Our example company needs to obtain the accurate and verified emissions of its Malaysian slab producer. If they use more than one slab supplier, they need to obtain the emissions of each of them and report the emissions separately.
Under the definitive CBAM rules, precursor indirect emissions must still be fully calculated, verified, and reported to determine the total embedded carbon footprint of the final “complex good.”
– Scope 1 Embedded Direct Emissions of the Precursor Slab
We assume the Malaysian supplier has provided a verified emissions statement stating that their specific direct embedded emissions are 1.70 t CO2/t slab (typical for the blast furnace/basic oxygen furnace route).
Precursor Emissions Scope 1= Slabs Produced 10,526.3tonnes *1.70 CO2/t = 17,894.7 tCO2
– Scope 2 Embedded Indirect Emissions of the Precursor Slab
To calculate the indirect emissions of the slabs, we use realistic industry operational data for the Blast Furnace / Basic Oxygen Furnace (BF-BOF) route:
- Specific Electricity Consumption for Slab Production: Approximately 0.60 MWh of electricity per tonne of slab produced (covering air separation units, water treatment, casting, and finishing auxiliaries).
- Grid Emission Factor for Malaysia:0.585 t CO2/MWh (based on the Malaysian national power grid mix).
Precursor Emissions Scope 2; Slabs Produced 10,526.3tonnes * 0.60 MWh/t * 0.585t CO2/MWh = 3,694.73 tCO2
Calculate the Total Emissions
841.5 tCO2 + 17,894.7 tCO2 + 3,694.73= 22,430.93 tCO2
| Note: in the example, 96% of the emissions (and of the CBAM financial liability) is caused by the Malay slab producer, but the Turkish steel exporter is legally liable for these emissions and financial costs. |
CBAM Certificates & Pricing
CBAM certificates are priced to mirror the EU ETS.
The Commission published the first quarterly price on 7 April 2026:
| Quarter | Publication Date | Price (€) per certificate |
| Q1 2026 | 7 April 2026 | 75.36 |
| Q2 2026 | 6 July 2026 | To be published |
| Q3 2026 | 5 October 2026 | To be published |
| Q4 2026 | 4 January 2027 | To be published |
Financial Calculation for the Example Company
Assuming a CBAM certificate price of €75.3, a total of zero EU free-allocation benchmark for Turkey and a CBAM factor of 2.5% at the time of surrender:
22,430.93t CO2* €75.36/tCO2 * 0.025 = €42,259.87
Independent Verification of the Emission Data
CBAM requires the emissions to be independently verified.
Accredited Verifiers
Only validation and verification bodies (VVBs) accredited by an EU National Accreditation Body (NAB) can issue valid CBAM verification reports. Verifiers must request registration in the CBAM Registry not before 1 September 2026.
To achieve accreditation, VVBs must comply with EN ISO 17029 and EN ISO 14065, demonstrate deep knowledge of CBAM monitoring and free-allocation rules, and maintain strict independence from both the operator and EU authorities. Furthermore, the audit team must include at least one CBAM lead auditor competent in English and one auditor fluent in the language of the facility (Turkish or Malay, depending on the site).
- This means that already in June 2026, we can assume which bodies will be able to become accredited verifiers as holding the requested ISO certificates and competence, but we don’t know for sure until the bodies are published in the CBAM registry.
Verification Process
A physical site visit to the Turkish rolling mill is mandatory for the first verification cycle. Because the final sheets are complex goods, the emissions of the Malay slab supplier must also be verified. This requires the Malay slab producer to undergo an audit by an accredited VVB, including a site visit in Malaysia. If the Malay supplier fails to provide verified actual emission data, the Turkish producer is forced to use default values for the precursor, neutralising the cost advantage of the Turkish mill’s efficient rolling process.
MM Markets maintains active partnerships with prominent international validation and verification bodies (VVBs) that meet the requirements of the CBAM regulation, and we know they plan to be accredited.
As site visits are required, we suggest international verification bodies with EN ISO 17029 and EN ISO 14065 certificates, AND offices in Turkey, and ideally in the countries of the slab producers.
Timeline risk
To mitigate compliance bottlenecks, Turkish steel exporters should immediately engage with their global slab suppliers to compile accurate, audit-ready precursor emissions datasets. Furthermore, establishing early contact with a number of prospective verification bodies is highly recommended to secure auditing capacity for Q1 2027, ensuring all verification reports are finalised well in advance of the 30 September 2027 annual declaration deadline. MM Markets can guide Turkish Steel Exporters in this process and make introductions.
Risk Management / Hedging
The price of CBAM Certificates (currently at €75.36/tCO2) is calculated based on the auction price of EU ETS allowances, as a quarterly average in 2026 and as a weekly average from 2027 onwards. The shift to weekly pricing in 2027 will provide more frequent prices and reduce the pricing gap that currently exists with quarterly updates, though it may also expose importers to greater short-term volatility.
Despite notable differences between institutional forecasts (ranging from €80 to €147/tCO2), the consensus suggests robust expectations for continued upward movement of carbon prices in the EU Emissions Trading System.
We don’t know the future CBAM Certificates pricing, but there is a reasonable risk of an increase in the price of CBAM Certificates, which will increase the future CBAM liability of the company.
There are a few options to reduce the risk:
- Our Turkish Exporter can transfer the price risk to the EU buyer, defining the price for the hot-rolled sheets (CN 7208) as the benchmark steel price (e.g. Argus/Platts) + CBAM Costs.
- Our Turkish Exporter can purchase CBAM certificates already now at current prices or at any time till the deadline in February 2027.
- Our Turkish Exporter can also purchase EU ETS Allowances in the large EU market for ETS allowances to lock the price.
2) and 3) are only profitable if the CBAM Certificates pricing increases more than the current price + transaction costs (roughly € 4-5/tonne), e.g. the price will be higher than ca. €80/tCO2. In order to monitor the price development, we suggest purchasing CBAM Certificates or EU ETS Allowances in tranches, adjusting volumes as the price develops.
