CBAM Calculation, Verification For Steel Exporters

An operational manual for steel exporters on authorisation, verification, pricing, reporting and decarbonisation under Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083

Simple and Complex Goods Principle

CBAM distinguishes between simple and complex goods.

Simple Goods are produced directly from raw materials without requiring other CBAM-covered goods as input materials.
CN 7206/7207 (ingots and semi-finished non-alloy steel, blooms, billets, slabs), CN 7218 (stainless equivalent), CN 7224 (other alloy steel equivalent). Pig iron (CN 7201) and DRI (CN 7203) are also simple (precursor) goods.
Complex Goods are produced using other CBAM-covered raw materials as precursors.
CN 7208 onward, namely hot- and cold-rolled flat products, bars, wire rod, plate (CN 7208-7217 non-alloy; CN 7219-7223 stainless; CN 7225-7229 other alloy). Plus, all fabricated articles like tubes CN 7304-7306, fittings CN 7307, structures CN 7308, wire products CN 7312–7317, fasteners CN 7318, etc.

What is not included in CBAM:

- Emissions from mining (even if they own the mines)
- Emissions from ore sorting, beneficiation, refining
- Emissions from alloying metals below the threshold of 5%: As long as alloying elements are below 5% of the total mass of the exported products, their emissions can be ignored. Still, the metal content has to be reported for information purposes.

European Parliament Regulatory Update: 7th July 2026

The CBAM regulatory update issued on 7th July 2026 announced the revised CBAM certificate price and provided clarifications on scope coverage:

Methodological Update: The (re-) inclusion of Scope 2 coverage for Steel and Iron & Steel products has been disregarded as such:
- Simple goods: Only Scope 1 emissions from the producer/exporter are required to be reported.
- Complex goods: For the 2026/2027 reporting period, the EU has streamlined requirements to include only Scope 1 emissions at both the exporter and precursor levels. Scope 2 emissions are expected to be reintroduced following a review in September 2026, with implementation anticipated from 2028 onward.

Expanded product coverage: Additional downstream steel products will fall under CBAM emissions reporting and liability obligations starting in 2028. The complete list of affected CN codes will be released later in 2026.
Updated CBAM certificate price: The certificate price for the current quarter is set at €75.28 per tonne CO₂.

Example Calculation – Turkish Steel Exporter

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).

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) 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 for each EU import.

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 1.00 t CO₂/t slab (typical for the blast furnace/basic oxygen furnace route).

Precursor Emissions Scope 1= Slabs Produced 10,526.3 tonnes *1.00 CO₂/t = 10,526.3 tCO₂

Calculate the Total Emissions

841.5 tCO₂ + 10,526.3 tCO₂ = 11,367.8 tCO₂

Financial Calculation for the Example Company

Assuming a CBAM certificate price of €75.28, a total of zero EU free-allocation benchmark for Turkey and a CBAM factor of 2.5% at the time of surrender:

Total production volume: 10,000 tonnes (CN 7208)
Total emissions: 11,367.8 tCO₂
Per tonne emissions: 1.1368 tCO₂/t
CBAM EU benchmark* (tCO₂/t) for Aluminum Profiles (CN 7208): 0.044 tCO₂/t
CBAM Certificate price: €75.28/tCO₂

Total CBAM liability: (1.1368 tCO₂/t – (0.044 tCO₂/t × 0.975)) × 10,000t × €75.28tCO₂ = €823,488

Default Turkish values

If actual, verified emissions data cannot be provided, including the emission of the precursor, our company must use the official country-specific default values.

Turkish Default Value for CN 7208 (2026): $2.6703 tCO₂ (includes the mandatory 10% mark-up).
Default Emissions for the Campaign: 10,000t* 2.6703tCO₂ = 26,703.0 tCO₂
Default Financial Liability: (2.6703 tCO₂/t – (1.370 tCO₂/t × 0.975)) × 10,000 × €75.28/tCO₂ = €1,004,650
Comparison: Actual vs. Default (Financial Penalty)

€1,004,650 – €823,488 = €181,162
Failing to provide actual verified emissions data will cost this company an extra €181,162 for the single 10,000-tonne campaign.
These extra costs will rise in the future as the CBAM factors (currently at 2.5% in 2026), this will progressively increase, and EU ETS prices are projected to rise from €75.28/tCO₂.