Default vs Actual Emissions: How to Work Out Your CBAM Cost Gap, with Cement and Steel Examples

Quick answer: your CBAM cost gap is the difference between what you pay on default values and what you would pay on verified actual emissions, multiplied by your tonnage. For efficient producers the gap is brutal: reported figures show Turkish clinker's carbon cost quadrupling from about 20 to about 80 euros per tonne under defaults, and scrap-based Turkish steel with a footprint near 0.9 tCO2 per tonne facing default-based liabilities around 140 euros per tonne. Whether that gap justifies the cost of verification is the single most consequential CBAM decision of 2026.

The five variables behind every CBAM bill

Strip away the annexes and a CBAM liability is built from five inputs.

1. Emission intensity, in tCO2e per tonne of product. Either your supplier's verified actual figure or the applicable default.
2. The default mark-up, if you are on defaults: 10% in 2026, 20% in 2027, 30% from 2028 for cement, steel and aluminium.
3. The free allocation adjustment. Certificates to surrender are reduced in line with the free allowances an equivalent EU installation would receive, calculated against route-specific benchmarks under Implementing Regulation (EU) 2025/2547. This deduction shrinks every year as EU ETS free allocation phases out through 2034, so the payable share of your emissions grows on a fixed schedule.
4. The certificate price, tied to the EU ETS: the quarterly average of ETS auction prices for 2026 imports, a weekly average from 2027.
5. Tonnage.

The skeleton of the calculation: certificates to surrender correspond to intensity times tonnage, minus the free allocation adjustment, and the cash cost is that certificate count times the ETS-linked price. Only the first variable is under your control, and only through data. Everything else is set by regulation and the carbon market.

That is why the gap between default and actual intensity is the decision variable. Every other lever is fixed.

Cement: the worked case the whole market is watching

Turkey supplies more cement and clinker to the EU than any other country, 4.8 million tonnes in 2025, and received no national default value. Unverified Turkish Portland cement therefore carries the "other countries" default of 1.584 tCO2 per tonne for 2026, which Argus priced at almost 83 euros per tonne at February ETS levels. Origins with national values pay less by default: Ukraine at 1.518, Algeria at 1.430, Egypt at 1.419.

Turkish industry data puts real kiln performance around 0.88 tCO2 per tonne. TURKCIMENTO, the producers' association, calculated that applying defaults instead of actuals lifts the carbon cost per tonne of clinker from roughly 20 to roughly 80 euros, a figure its CEO noted can exceed the unit price of the exported product itself. Read that again: the compliance charge on the wrong data can be worth more than the cement.

The gap, then, is on the order of 60 euros per tonne for an efficient plant stuck on defaults. At even modest export volumes, verification costs disappear into rounding.

Steel: efficiency erased by averages

About 70% of Turkish steel is produced through the scrap-based electric arc furnace route, one of the lowest-carbon paths available. Under defaults, that advantage vanishes into country and product averages. The Turkish steel associations report defaults of 2.428 and 2.310 tCO2 per tonne assigned to certain flat products and wire rod, against roughly 0.70 tCO2 per tonne for actual EAF production, and McCloskey calculations reported by EUROMETAL put default-based CBAM liability for scrap-EAF Turkish hot rolled coil around 140 euros per tonne, for material whose environmental product declarations sit near 0.9 tCO2 per tonne. At the extreme end, EUROMETAL's 2026 summit heard that the default for Turkish stainless billet reaches 367 euros per tonne, the fourth highest in the world.

The pattern generalises beyond Turkey. For Chinese blast furnace slab, the default of 3.167 tCO2e per tonne exceeds the sector benchmark of 1.370 by more than 130%. Wherever a producer is cleaner than its country average plus mark-up, defaults overcharge; wherever it is dirtier, defaults undercharge. Averages punish exactly the plants CBAM claims to reward.

When verification pays for itself

The decision rule is short: estimated gap in euros per tonne, times annual tonnes into the EU, against the cost of installation-level monitoring plus accredited verification. Behaviour during the transitional phase already showed how this resolves at scale: early quarters ran overwhelmingly on defaults, then actual-data use climbed as volumes concentrated, with the largest consignments overwhelmingly reported on actuals. Big tonnage went first because big tonnage recovers the verification cost fastest.

For importers with many suppliers, triage beats blanket policy. CBAM adviser Pauline Miquel's guidance to fertiliser importers applies across sectors: assess the default cost impact supplier by supplier and concentrate effort where the reduction potential is largest.

Three traps in the arithmetic

One, the inputs move. The Commission replaced the default annexes on 31 July 2026 with retroactive effect, so any gap computed on December figures needs re-running. Two, home carbon prices only reduce CBAM when effectively paid: Turkey's pilot emissions trading scheme runs on full free allocation in 2026, so there is currently no Article 9 deduction to soften the bill. Three, actuals are not automatically cheaper. A plant running dirtier than its country average plus mark-up is better off on defaults, which is precisely why the mark-up ratchets upward.

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