What Chinese Steel Really Costs Under CBAM in 2026, per Tonne

AI Summary

The 2026 CBAM cost per tonne of Chinese steel lands between EUR 156 and EUR 164. Unwrought aluminium costs EUR 144 and grain-oriented electrical steel EUR 539.91. Every figure rests on a default-value table the Commission replaced retroactively in July 2026, and on a factor most readers take backwards.

Most writing on CBAM repeats a number without the table behind it. There is a specific reason that number cannot be trusted, and it has nothing to do with the arithmetic being hard.

The instrument that sets the bill is not the one everybody cites.

What happened

Two regulations sit under every per-tonne CBAM figure in circulation, and only one of them governs.

The first was published on 31 December 2025. Commission Implementing Regulation (EU) 2025/2621 fixed country-level default emission values per CN code, in time for the definitive regime to start on 1 January 2026. Its Annex I went together under time pressure, and the Commission has since said so: “Some default values in some of the tables in Annex I to Implementing Regulation (EU) 2025/2621 are erroneous as a result of transcription mistakes that were made when the tables were consolidated within a short time frame.”

The second replaced it in its entirety. Commission Implementing Regulation (EU) 2026/1740 was adopted on 20 July 2026 and published in the Official Journal on 31 July 2026. Article 1(1) does not amend the old annex: “Annex I to Implementing Regulation (EU) 2025/2621 is replaced by the text in Annex I to this Regulation.” Article 2 does the rest — the replacement “shall apply from 1 January 2026.” The table that governs every CBAM calculation was published in July, and it applies backwards.

And the correction is not cosmetic. Compare China’s rows in the two texts. For almost every Chinese CN code the number is unchanged. For one it is not. In the 2025 version, China’s row for CN 7601, unwrought aluminium, carried no value at all. In the corrected text, CN 7601 reads 3,000 tCO2eq per tonne on route (K), primary aluminium. Through the first half of 2026, the largest CBAM exposure after steel had no published default value in the table meant to supply it.

The second trap is built into the table’s shape. The 2025 version printed pre-computed columns for each future year, each already carrying that year’s mark-up: a 2026 column, a 2027 column, a 2028 column. The corrected version stripped them out. It prints one bare total per CN code, and the mark-up is then imposed as a rule by the chapeau to Annex I.

Mark-up — an uplift the law applies to the published country default value when an importer declares without verified actual emissions. It is not in the table. For iron and steel and aluminium it is 10 per cent in 2026, 20 per cent in 2027 and 30 per cent from 2028.

A number taken from a page written before 31 July 2026 cannot be traced to one text or the other. The value looks the same; the table underneath it is gone.

Why now

The regime has been charging since 1 January 2026, and the money moves in 2027. The transitional reporting period ended on 31 December 2025 and the definitive regime applies from 1 January 2026 under Article 35(2)(b) of Regulation (EU) 2023/956. Nothing is paid in cash during 2026: certificates go on sale on the common central platform from February 2027, and the first declaration and first surrender are due by 30 September 2027 for the 2026 calendar year.

The price is fixed retrospectively, once a quarter. Under Article 21(1a), inserted by Regulation (EU) 2025/2083, the 2026 price is the quarterly average of EU ETS auction clearing prices for the quarter of importation, weighted by auctioned volume and rounded to the cent. Two of the four 2026 prices exist: EUR 75.36 for Q1, published 7 April 2026, and EUR 75.28 for Q2, published 6 July 2026. Q3 is scheduled for 5 October 2026 and was still blank on the Commission’s page on 3 October.

The deduction is where almost every summary goes wrong. The charge is not the embedded emissions. It is the emissions minus a free-allocation adjustment, because EU producers receive free allowances and the mechanism is built to match them rather than exceed them. The full chain is printed below.

The CBAM factor is the share of free allocation still in place, not the share being charged. In 2026 it is 97.5 per cent. Read the name the way it sounds and 2026 appears to charge 2.5 per cent of the carbon cost. Read it correctly and 97.5 per cent of the benchmark is deducted, leaving 2.5 per cent of the benchmark charged — an order of magnitude apart, and the second reading is the true one. The phase-down is back-loaded: 95.0 per cent in 2027, 90.0 in 2028, 77.5 in 2029, 51.5 in 2030 and 0.0 by 2034, while the mark-up climbs on the other side of the same subtraction.

One caveat belongs here rather than in a footnote. The CBAM factor is defined by cross-reference to Article 10a(1a) of the ETS Directive 2003/87/EC in Annex point 4 of Regulation (EU) 2025/2620, while its published values come from Table 2-1 of the Commission’s Guidance Document No. 4 of 14 August 2026 — a document headed “not legally binding and it is of an explanatory nature” — where the 2026 cross-sectoral correction factor is labelled “(preliminary)”. The consolidated ETS Directive was not retrievable, so the underlying article is not quoted.

So what

Take one tonne of Chinese hot-rolled coil, CN 7208, worked step by step under how we calculated this. Every input is published; only the multiplication is mine. The result is EUR 163.53 a tonne at the Q1 2026 price of EUR 75.36.

Rerun the same chain across China’s main CN codes and the shape of the exposure appears, and it is not what most importers expect:

Flat steel is cheap; fabricated steel is not. Hot-rolled coil carries EUR 163 a tonne and cold-rolled EUR 158, but bolts carry EUR 428 and steel structures EUR 391. The reason is not the benchmark, which barely moves, but the default value, which more than doubles once the good is fabricated: a fastener exporter faces two and a half times the carbon cost per tonne of a coil exporter, on the same origin and route. It also lands alongside the EU’s other tightening checks, covered in the GPSR sweep findings.

Aluminium is the gap in the coverage, not in the cost. Chinese primary unwrought aluminium carries EUR 144 a tonne, below hot-rolled coil, because China’s default value of 3,000 is under steel’s and the benchmark deduction is larger. No English-language page found publishes a per-tonne CBAM cost for Chinese aluminium, and the row that produces the figure was empty in the December 2025 text. The bill compounds from both directions. Holding the benchmark and the price still, Chinese hot-rolled coil runs EUR 163.53 in 2026, EUR 190.08 in 2027 and EUR 219.30 in 2028. It is not the largest charge on the same tonne: the EU steel out-of-quota duty is 50 per cent of CIF, as the steel safeguard quota analysis sets out.

One number in circulation does not reconcile. EUROMETAL reported a 2026 China steel slab cost of about EUR 144 a tonne, attributed to Fastmarkets. Chinese slab sits under CN 7207, default value with mark-up about 3.486 tCO2eq per tonne: roughly EUR 262 before the free-allocation adjustment, EUR 162 after. It matches neither.

One number in circulation does reconcile, and that is the useful test. SMM’s analysis of 18 August 2026 puts Chinese hot-rolled coil at about EUR 163 a tonne and cold-rolled at EUR 158, agreeing with the chain above to within EUR 0.35 a tonne, and it describes the CBAM factor correctly. The same piece cites no default value per CN code, names Regulation (EU) 2026/1740 nowhere, and carries no aluminium figure.

For you

• Importers of Chinese steel who modelled off a 2025 or early-2026 guide: re-derive the figure on the corrected Annex I. For hot-rolled and cold-rolled coil the values match, so your number survives. If your supplier ships fabricated goods, fasteners or electrical steel, check each CN code individually — that is where the default values diverge.
• Importers of Chinese aluminium: your exposure starts at EUR 144 a tonne for unwrought primary metal and rises to EUR 343 for foil. The row that produces it was blank in the December 2025 text, so an early-2026 estimate either omitted this line or guessed it.
• Anyone near the 50-tonne threshold: the exemption is 50 tonnes of net mass per importer per calendar year, aggregated across every CN code and across the cement, iron and steel, fertiliser and aluminium sectors together — not per consignment, not per CN code. Cross it and the exemption is gone for the whole year, including the tonnage below 50 tonnes. It is claimed under TARIC code Y137, and it does not apply to electricity or hydrogen.
• Anyone budgeting cash for 2026: nothing is payable. Certificates go on sale from February 2027, the first surrender is due 30 September 2027, and there is no quarterly holding requirement during 2026; from 2027 a 50 per cent holding applies. Add it to the other EU import cost on the same invoice, the per-item customs charge.
• Anyone holding a Chinese carbon price they intend to deduct: it does not reduce the bill yet. Article 9(5) of Regulation (EU) 2023/956 requires an implementing act for the modalities of offsetting a carbon price paid in a third country, and DEHSt records that it has not been adopted. Assume zero deduction for 2026.

The data point

FAQ

Why does the CBAM factor of 97.5 per cent not mean 2026 charges 2.5 per cent?

Because it measures what is retained, not what is charged. The factor is the share of free allocation still in place, so 97.5 per cent of the benchmark is deducted before anything is charged, and 2.5 per cent of the benchmark is charged. For Chinese hot-rolled coil the deduction removes 1.33575 of the 3.5057 tonnes otherwise billed, which is 38 per cent of the bill.

Which regulation governs the default values, and what does a tonne cost?

Commission Implementing Regulation (EU) 2026/1740, published 31 July 2026. Article 1(1) replaces Annex I to Regulation (EU) 2025/2621 in its entirety and Article 2 applies the replacement from 1 January 2026. The Commission’s stated reason is transcription mistakes made when the 2025 tables were consolidated under time pressure. For most Chinese CN codes the values are unchanged, which is why a number from an older page looks right and cannot be verified. The per-tonne costs are in the table above; each is the corrected default value plus a 10 per cent mark-up, minus the benchmark multiplied by 0.975, times the quarter’s price.

When is this actually paid, and is anything due in 2026?

Nothing is paid during 2026. Certificates are sold on the common central platform from February 2027, the first declaration is due by 30 September 2027 for the 2026 calendar year, and the first surrender falls on the same date. The 50 per cent quarterly holding obligation applies from 2027 and there is none for 2026. Budget it as a 2027 cash item, and note that the price moves from a quarterly to a weekly average from 2027.

Is any per-tonne figure for Chinese steel or aluminium published officially?

No. The Commission publishes the prices and the inputs, and its Guidance Document No. 4 works through the free-allocation arithmetic using a hypothetical good. No document opened in this research states a per-tonne CBAM cost for a named CN code and a named country, and no third-party page found publishes one for Chinese aluminium. That is why the table above prints every input rather than only the answer: each is checkable against the Official Journal, so the only unpublished step is the multiplication.

How we calculated this

Every published input is printed in the table under So what; the two inputs that are yours are the CN code and the quarter of importation, because the price is fixed per quarter. The arithmetic is four steps:

embedded tCO2eq/t = corrected default value x (1 + mark-up)         3.187 x 1.10 = 3.5057
SEFA tCO2e/t      = benchmark x CBAM factor x CSCF                 1.370 x 0.975 = 1.33575
chargeable        = embedded - SEFA                                 3.5057 - 1.33575 = 2.16995
EUR/t             = chargeable x certificate price for that quarter 2.16995 x 75.36 = 163.53

Substitute your own CN code, whose default value and benchmark both come from the Official Journal, and the certificate price for the quarter your goods were imported in.

The point

The number is not the story; its provenance is, and in this regime provenance carries a date. Two facts decide whether a per-tonne CBAM figure is worth anything: which annex it came from, and whether the factor behind it was read in the right direction. One of those annexes was replaced retroactively five months into the regime that depends on it, and the replacement filled a gap that had left Chinese aluminium without a published default value at all.

Independent analysis, not financial or legal advice.