The choice between default values and actual data is not purely administrative. It directly determines how many CBAM certificates you need to surrender and therefore your compliance cost. For importers buying steel from a modern electric arc furnace, the difference between using defaults and using actual data can be substantial.
Why default values are deliberately punitive
CBAM default values are not an estimate of average production emissions. They are set at the 90th percentile of the least efficient EU installations covered by the EU ETS. This means roughly 90% of EU production is cleaner than the default. Most modern non-EU production is also cleaner than the default, particularly for electric arc furnace steel.
The design is intentional. If defaults were set at the average, using them would be cost-neutral compared to actual data for half of suppliers. By setting them high, the Commission creates a strong incentive to invest in collecting actual supplier data. The importer bears the cost of not doing so.
The cost gap in practice
To illustrate the difference, take hot-rolled steel coil (CN code 7208) imported from Turkey. The EU default value for this product is approximately 2.6 tonnes of CO2 per tonne of steel. A modern Turkish electric arc furnace plant producing from scrap typically has actual specific emissions of 0.8 to 1.1 tonnes of CO2 per tonne of steel.
With a CBAM certificate price of EUR 65:
| Basis | Specific emissions (tCO2/t) | CBAM cost per tonne of steel | CBAM cost for 500t import |
|---|---|---|---|
| EU default value | ~2.6 | EUR 169 | EUR 84,500 |
| Actual (EAF plant) | ~0.95 | EUR 62 | EUR 30,875 |
| Actual (blast furnace) | ~2.1 | EUR 137 | EUR 68,250 |
The difference between a default-based declaration and actual data from an EAF plant is EUR 53,625 per 500 tonnes. For importers with 5,000 tonnes annually, that is over EUR 500,000. The investment in getting a supplier monitoring report verified is a fraction of this.
What "actual verified data" requires from your supplier
To use actual data in your CBAM declaration, the production facility must provide:
- A documented monitoring plan that meets the requirements in Annexes III and IV of Commission Implementing Regulation (EU) 2023/1773.
- Activity data records: fuel consumption, electricity consumption, production volumes, per monitoring period.
- A verification report issued by an accredited third-party verifier confirming the monitoring approach and data are compliant.
Under the CBAM implementing rules, the non-EU operator (supplier) must communicate the specific embedded emissions to the CBAM declarant. The communication must include the relevant data from the monitoring plan and the verification report. An importer cannot self-certify a supplier's emissions; the data must come from the operator.
Suppliers who cannot provide data
Some non-EU producers, particularly smaller facilities or those in countries with no domestic emissions monitoring infrastructure, cannot provide compliant verified data. In this case, your choices are:
- Use the EU default values and accept the higher certificate cost.
- Work with the supplier to set up a monitoring plan and verification process, which may take 6 to 12 months to implement properly.
- Switch to a supplier who already has CBAM-compliant emissions monitoring in place.
Larger producers in Turkey, India, Brazil, and China with significant EU export volumes have generally begun implementing monitoring systems in anticipation of CBAM. Smaller, specialist producers have not. Before committing to a multi-year supply contract, verify the supplier's CBAM readiness.
When you mix default and actual data in one year
If you begin the year using default values because your supplier has not yet completed their verification process, and they provide verified data mid-year, you can update your annual CBAM declaration before the 30 September filing deadline to reflect actual data for the period where it is available. You report defaults for the period before verification was complete and actual values from the date verification was concluded.
Keep the documentation. The competent authority may audit your declaration and request evidence that the transition from default to actual data was handled correctly and that the supplier data is genuinely verified.