BlogCarbon Border Adjustment Mechanism (CBAM)

EU CBAM imports with 258 Mt CO2 in 2023

Written by

Ulf Narloch

Published on

The EU’s carbon border adjustment covers imported goods in carbon-intensive sectors. The latest EU trade data shows that in 2023 these imports have a value of EUR 94bn and embedded emissions of 258 Mt CO2e. When fully phased-in, these imports would have resulted in total CBAM levies of EUR 15bn at 2023 EU-ETS prices.

CBAM as a trade measure

The transitional period of the EU’s Carbon Border Adjustment Mechanism (CBAM) is in full swing. Importers of CBAM goods are already obliged to hand in quarterly reports about the emissions embedded in their imports.

Although CBAM is at the heart of the EU Fit-for-55 climate policy, it is a trade measure as well. From 2026, CBAM is introducing a carbon-based levy on imports into the EU. Hence, it will affect trade flows, as shown in recent studies.    

CBAM is designed as a solution to prevent carbon leakage to non-EU countries. It goes hand in hand with the phasing-out of free emissions allowances in the EU Emissions Trading Scheme (ETS).

So far, no adjustments are built into these mechanisms for EU exports, raising the risks that these become uncompetitive in foreign markets. For imports, however, CBAM levels the playing field between EU producers and those outside of the EU, who do not fall under similar carbon pricing.

Countries and goods under CBAM

Accordingly, imports from countries with emissions covered by the EU-ETS or a linked trading systems do not fall under CBAM. Currently, these are Norway, Iceland, Liechtenstein and Switzerland. Any country introducing carbon prices higher than in the EU-ETS would also be excluded from CBAM.

While a CBAM expansion will be assessed by the EU Commission, initially it covers six sectors with the highest risk of carbon leakage. These are iron & steel, aluminum, cement, fertilizers, electricity, and hydrogen. When fully phased in, CBAM would cover more than 50% of the emissions in ETS covered sectors.

In these sectors a total of over 500 goods as differentiated by the 8-digit codes of the Combined Nomenclature (CN) fall under CBAM. These CN codes are grouped into 20 CBAM goods categories, which determine the reporting rules

EU imports exposed to CBAM

Based on the latest EUROSTAT trade data published in April, in 2023 EU imports of these CBAM goods accumulated to a total value of EUR 94bn making ca. 4% of all EU imports from third countries.

Overall, total EU imports dropped by 13% in 2023 following a strong 2022, which reflected both a COVID-19 recovery and price increases. Since February 2023, EU imports have fallen every month.  

Similarly, imports of CBAM goods closed at a low of EUR 20bn in Q4 2023, when CBAM reporting started, compared to EUR 25bn in Q1 2023.

These CBAM values exclude CBAM goods imported from Norway, Iceland, Liechtenstein and Switzerland, which amounted to EUR 18bn, mostly from aluminum (EUR 8bn) and electricity (EUR 6bn).

In terms of quantities, a total of 98 Mt of CBAM goods were imported in 2023, excluding electricity. Iron and steel account for the majority of this amount of imports at around 70%.

Embedded Emissions vary by CBAM sector

Based on CO2 IQ analyses, imported CBAM goods in 2023 have embedded emissions of 258 Mt CO2e, mostly from iron & steel. These are direct emissions released during the production of these goods or indirect emissions from electricity used in their production.

These estimates are based on the EU default values to be used for CBAM reporting. These default values reflect global averages in emissions intensities. Only for electricity, country-specific CO2 intensities are calculated based on fossil fuels used.

In the second half of 2024, actual emissions data is to be used in CBAM reports. In the long-run, emission intensities will fall with a switch to greener production modes.

Iron & steel

More than half of these embedded emissions stem from CBAM goods in the iron and steel sector with 134 Mt CO2e.

13% of these emissions come from pig iron and direct reduced iron, 13% from crude steel, and 65% from iron and steel products. Within the latter category, flat rolled products of iron or non-alloy steel in various forms of hot rolled, and clad, plated or coated, as well as structures stand out with the largest emissions.


Embedded emissions from imported CBAM goods in the aluminum sector are at 67 Mt CO2e or 26% of CBAM emissions in 2023.

43 Mt CO2e comes from unwrought aluminum with more than half of it from not alloyed aluminum. Alloyed bars, rods and profiles, structures and parts of structures and non-alloyed wire are the largest single contributors to the 24 Mt CO2e from aluminum products.  


Emissions from fertilizer and their precursors falling under CBAM accumulated to 26 Mt CO2e or 10% of CBAM emissions. 

Almost half of these emissions are related to urea (12 Mt CO2e), 30% to mixed fertilizer (8 Mt CO2e), and 20% to ammonia (6 Mt CO2e) imports.  


At 8 Mt CO2e, only 3% of CBAM emissions come from imports in the cement sector. This is due to the limited extra-EU area trade in these goods.

Cement and cement clinker each contribute half of these emissions with smaller imports and thus smaller emissions from aluminous cement and calcined clay.


Currently, electricity imports under CBAM rules have embedded emissions of 22 Mt CO2e which equals to 9% of the total CBAM emissions.

UK and Serbia are the most important EU trade partners for these imports. Larger imports from Switzerland and Norway are not covered by CBAM.

CBAM costs are uncertain

CO2 IQ analyses show that these emissions would have resulted in CBAM costs of over EUR 15bn with a fully phased-in CBAM levy. This was calculated based on the prices of ETS allowances in the primary market. On average, these prices were at EUR 83.66 in 2023.

Ultimately, CBAM costs will depend on the development of EU-ETS prices. With current ETS prices reaching a low in February 2024 at about EUR 50, costs would be at EUR 9bn only. With price levels beyond EUR 120, as predicted by many experts, they could rise above EUR 22bn.

At current import levels, three quarters of these costs would be borne by metal importers, who purchase iron, steel, aluminum and their products from non-EU countries. For these imports only direct emissions will be priced under CBAM.

These calculations do not take into account any potential carbon prices in the countries of origin. Paid carbon prices can be deducted from the CBAM levies.

CBAM levies will be phased in starting in 2026. Initially, they will be adjusted for a CBAM factor that will be slowly ramped up with the phase-out of the free ETS allowances. This factor starts at only 2.5% in 2026 reaching 48.5% in 2030 to get to 100% in 2034. With this, CBAM costs will only start to bite after 2030.

For now, CBAM has no cost implications. In the transitional period until the end of 2025, only CBAM reporting obligations apply. Penalties apply even if there aren’t any carbon expenses up until then. Importers who do not comply with these reporting obligations face penalties of EUR 10-50 per ton of unreported emissions.

Estimating your CBAM exposure

For individual firms, their CBAM costs exposure will greatly vary depending on the emissions intensity of the imported CBAM goods, the imported amount, and also the country of origin.

Based on the category of CBAM goods imported, our new online calculator indicates the potential cost range. Detailed estimates are available through the CO2 IQ CBAM Importer Portal based on a full list of the CN codes of imported goods.

(this blog was updated on June 04, 2024)

Sources and further information:

Photo by Ammiel J Wan on Unsplash