CBAM Regulation in Practice: Calculations, Costs, and Recommendations for Businesses

In the previous article, we reviewed the fundamental principles of the CBAM Regulation, its scope of application, and the main obligations for businesses importing certain goods into the European Union. However, to ensure practical compliance with CBAM requirements, theoretical understanding alone is insufficient—businesses must be able to assess how the regulation will affect specific import transactions and what additional costs may be incurred.

In this article, we will focus on the practical side of CBAM—we will examine how CBAM liabilities are calculated, what potential costs businesses might face, and what factors can influence the magnitude of these costs. We will also look at what data businesses should collect, how to prepare for the new requirements, and what practical steps should be taken now to avoid unforeseen risks in the future.

CBAM will not merely be an administrative obligation; in many cases, it may become a significant issue for cost and supply chain management. Therefore, timely preparation and understanding of the calculation mechanism will enable businesses to better assess the regulation’s impact and make informed business decisions.

How are CBAM liabilities calculated?

In a simplified manner, CBAM financial liabilities can be illustrated with the following formula:

CBAM liabilities = embedded emissions × CBAM certificate price,

however, the actual calculation must also take into account:

a) adjustment for free allocation of EU ETS allowances;
b) the carbon price actually paid in the country of origin, if it meets the regulation’s requirements;
c) other regulatory elements applicable to the specific good and period.

Therefore, a simplified formula where the imported quantity is multiplied only by the emission intensity and certificate price is not sufficient on its own for determining the final CBAM liabilities.

Calculation Example

To illustrate the potential financial impact that businesses must anticipate when importing goods covered by the CBAM Regulation into the European Union, a simplified calculation example is provided below.

Assume that grey Portland cement is imported into the European Union from China. 2026. During one quarter of the year, the importer brings in 60 tons of the aforementioned goods, thereby exceeding the CBAM threshold and becoming subject to the CBAM Regulation. Consequently, the importer has an obligation to ensure compliance with CBAM requirements, including the purchase and surrender of an appropriate number of CBAM certificates.

Since the importer does not have information on the actual emissions generated during the production process of the goods in the third country, the default emission values set by the European Commission are used for the calculation, as provided for cases where actual emission data are not available. These values are determined in accordance with European Commission Implementing Regulation (EU) 2025/2621.

The data used in the calculation are summarized in the table:

One of the most significant practical challenges of CBAM requirements is that the information to be declared cannot be obtained by a company solely from its accounting or customs data.

CBAM reporting for a company is not merely a tax or customs matter. It also affects procurement, logistics, financial accounting, sustainability functions, data management, and relationships with foreign suppliers.

It is particularly important to agree with suppliers in a timely manner on the format and regularity with which emission data will be received.

What documents must a company retain?

CBAM requirements do not end with the submission of the declaration. The company must ensure sufficient documentation to substantiate the data provided in the declaration, if necessary.

In practice, systematic storage of the following documents and data should be ensured:

a) customs declarations for CBAM goods;
b) information on the quantity and CN codes of imported goods;
c) emission data provided by manufacturers;
d) documentation on emission calculation methodology;
e) information on production facilities and processes used;
f) verifiers’ reports, if actual emissions were used;
g) documentation of CBAM certificate purchase and surrender;
h) documents substantiating the carbon price paid in the country of origin;
i) calculations for free allowance adjustments;
j) correspondence with suppliers, manufacturers, verifiers, and competent authorities.

It is also crucial to ensure data consistency between customs documents and the CBAM declaration. Customs authorities transmit import information for CBAM purposes, and discrepancies between customs data and the information provided in the CBAM declaration can serve as grounds for control.

What are the risks if a company fails to comply with CBAM requirements?

The CBAM Regulation provides for financial sanctions for the non-surrender of certificates within the prescribed period. The amount of the sanction is linked to the EU ETS excess emission penalty (EUR 100 per ton of emissions), which is adjusted according to inflation rates. Furthermore, payment of the penalty itself does not exempt the company from the obligation to surrender the missing CBAM certificates.

Therefore, the risk of CBAM sanctions is not merely a one-time fine. If a company has not adequately prepared data or has not purchased a sufficient number of certificates, it may incur both sanctions and an additional financial obligation to purchase and surrender the missing certificates.

Moreover, discrepancies may be identified not only in the company’s own declaration but also by comparing CBAM information with customs data and information provided by other involved parties.

CBAM Becomes a Company Cost and Supply Chain Issue

CBAM is no longer just a future regulation or a requirement pertaining to sustainability reports. As of 2026, it has become a practical requirement for importers that can directly impact company costs, product prices, supplier selection, and supply chain structure.

The most significant challenge for companies currently is not merely the submission of the declaration in September 2027. Much more important is the process that must be established beforehand—correct identification of CBAM goods, customs data recording, cooperation with foreign manufacturers, acquisition of emission data, selection of emission calculation methods, and, if necessary, organization of verification.

Therefore, companies importing goods subject to the CBAM Regulation should use 2026 not just for preparing the declaration, but for establishing a CBAM data and internal control system. The earlier a company organizes its supply chain and emission data flow process, the lower the risk that fulfilling CBAM requirements in 2027 will lead to unforeseen costs, administrative burden, or sanction risks.

What should companies do now?

Although the first annual CBAM declaration for 2026 imports will only be due on September 30, 2027, preparation must effectively commence in 2026.

Companies that may be subject to CBAM are advised to take at least the following steps:

1. Identify CBAM goods and their volume – review the CN codes of imported goods or only planned imported goods and determine which goods fall within the scope of CBAM. If the 50-ton threshold is exceeded during the year, authorized CBAM declarant status must be obtained.

2. Choose an emission calculation approach – assess whether it is more advantageous in the specific case to use actual emissions or the default values set by the Commission.

3. Agree with suppliers on emission data – timely determine what data on production, energy consumption, emissions, and precursors will need to be received from manufacturers and whether manufacturers are capable of providing this data and willing to participate in the verification process. If the company plans to use actual emissions, time and resources must be allocated for cooperation with an accredited CBAM verifier.

4. Establish CBAM data record-keeping – CBAM information must be available in a format that allows it to be checked and compared with customs data, quickly tracked and compiled to settle CBAM liabilities in 2027 and subsequent years. Furthermore, data records must be maintained for 4 years after the surrender of CBAM certificates, so that in the event of an audit, the company can present the necessary documentation.