Default Values vs Verified Data: The CBAM Decision That Will Define YourCost Exposure

When the EU CBAM entered itsdefinitive phase in January 2026, it created a choice that every importer ofcovered goods will face — and many are underestimating.

The choice is this: pay your CBAMliability based on the European Commission's published default values forembedded emissions in your goods, or invest in obtaining verified actualemissions data from your overseas suppliers and pay based on that instead.

On the surface, using defaultvalues sounds like the path of least resistance. They are publicly available,require no supplier engagement, and avoid the cost and complexity ofthird-party verification. In practice, for the majority of importers, they aresignificantly more expensive than the alternative — and the gap is growing.

How default values work

Default values are the EuropeanCommission's published estimates of the embedded greenhouse gas emissionsintensity for each category of CBAM good. They represent a worst-case scenariorather than an average — set at the highest emission intensity observed amongcountries with reliable data for each product type, or based on applicableregion-specific values.

In late 2025, the Commissionpublished revised default values and benchmarks as part of its implementinglegislation package. For steel, aluminium, and iron, embedded emissions fromprecursor goods are now counted by default, while emissions from finishingprocesses are excluded in alignment with EU ETS rules.

The effect is straightforward: ifyou import a tonne of steel and use default values, your CBAM liability iscalculated against a higher emissions figure than probably reflects the actualcarbon intensity of your specific supplier's production. You are paying for aworst-case global emissions profile, not your supplier's actual performance.

The financial stakes

CBAM certificate prices are linkedto the EU ETS allowance price, which rose sharply through 2025 and is expectedto continue rising as the definitive phase drives greater demand. At ETS pricesin the range of €50–70 per tonne — which was relevant for much of 2025 — thedifference between default and actual emissions data for a mid-sized steelimporter can amount to tens or hundreds of thousands of pounds per year inadditional CBAM liability.

For the EU CBAM, the financialliability materialises from February 2027, when certificate purchases begin.But the embedded emissions data being used to calculate that liability relatesto goods imported throughout 2026. Every import made this year is accumulatinga CBAM obligation — and the data quality underpinning those calculations isbeing determined now.

For the UK CBAM, which takeseffect from 1 January 2027, the same dynamic will apply from day one. CBAMrates are calculated quarterly, and the embedded emissions figure in yourannual CBAM tax return determines your total liability for the year.

What verified actual data requires

To use actual emissions data inCBAM declarations rather than defaults, that data must be verified by anaccredited third-party verifier. The verification process has specificrequirements that businesses should understand before committing to this path.

Third-party accreditation

Verifiers must be accredited by arecognised national accreditation body. The pool of accredited CBAM verifiersis limited and is facing capacity constraints as demand grows. Early engagementwith a verifier is strongly advisable.

On-site audit in the first year

For the first verification of agiven installation, verifiers must conduct an on-site audit at the facilitywhere the goods are produced. This means engaging your overseas suppliers toallow a verifier physical access to their operations — a requirement thatdemands advance planning and strong supplier relationships.

Data methodology review

Verifiers assess not just theemissions figures themselves, but the methodology used to collect them —including system boundaries, precursor emissions accounting, and productionroute allocations. Figures that appear plausible may still fail verification ifthe underlying methodology is not robust and well-documented.

Five percent materiality threshold

Verifiers apply a 5% materialitythreshold to the data they assess. If verification fails — or if it is notcompleted before your declaration deadline — you revert to default values forthat supplier's goods. The cost advantage you were working toward disappears atprecisely the moment financial liability begins.

Carbon Price Relief: another reason to get supplier data right

Both the EU CBAM and theforthcoming UK CBAM include provisions for Carbon Price Relief — a mechanismallowing importers to deduct carbon costs already paid by their overseassupplier in their country of production, from their total CBAM liability.

For importers sourcing fromcountries with established carbon pricing mechanisms, this can be a meaningfulreduction in total cost. But to claim it, you need accurate, documentedevidence of the carbon price paid in the third country, along with the methodologyfor calculating it.

This is another area wheresupplier relationships and data quality directly translate into financialoutcome. The more you understand your supply chain's carbon position, the morelevers you have to manage your CBAM exposure.

The supplier engagement challenge

For most UK importers, the hardestpart of obtaining actual emissions data is not the verification process itself— it is getting overseas suppliers to engage with the request in the firstplace.

Many non-EU, non-UK manufacturers— particularly in markets such as Turkey, India, or China — have nothistorically been required to measure or report embedded emissions at theinstallation level. They may lack the internal data, the expertise, or the commercialmotivation to invest in generating it.

This creates a real competitivedynamic. Importers who build strong supplier relationships and invest insupporting their overseas partners through the data collection process will beable to use actual emissions data — and gain the cost advantage that brings.Those who cannot secure supplier engagement will default to published defaults,with no visibility or control over their CBAM liability.

The supplier engagement processtakes time. It involves:

•      Communicating what data isrequired and in what format

•      Supporting suppliers inestablishing internal measurement processes if they do not already exist

•      Managing data collection onan ongoing basis across multiple suppliers and product categories

•      Coordinating third-partyverification across potentially complex, multi-country supply chains

This is not a process that can bestarted six weeks before a declaration deadline. It needs to be underway now,for liabilities that are already accruing.

Practical steps for importers

Whether your first CBAM obligationrelates to the EU (2026 imports, declaration due September 2027) or the UK(imports from January 2027), the preparation process is the same. The time toact is now.

Map your exposure by product and supplier

Identify which goods fall withinCBAM scope, which suppliers produce them, and what you know about the carbonintensity of their production processes. For most importers, a clear picture ofexposure is the single most valuable thing to establish first.

Calculate the default value cost

Look up the Commission's publisheddefault values for your product categories and calculate what your approximateCBAM liability would be if you relied entirely on defaults. This gives you afinancial baseline to compare against the cost of obtaining verified data — andoften makes the case for verification very clearly.

Prioritise your highest-volume, highest-risk suppliers

You do not need to start verifieddata collection across your entire supply chain simultaneously. Focus first onthe suppliers responsible for your highest CBAM cost exposure. A Paretoanalysis of suppliers by volume and estimated embedded emissions typicallyreveals that a small number of suppliers account for the majority of your CBAMrisk.

Open supplier conversations now

Explain what CBAM requires, whatdata you need, and why it is in both parties' commercial interest to get itright. Consider incorporating CBAM data obligations into your suppliercontracts going forward — this creates clarity, accountability, and a documentedbasis for the data you rely upon.

Identify accredited verifiers and book early

Verification capacity is limited.Identify suitable accredited verifiers, understand their timelines and costs,and begin the engagement process before demand peaks. For overseasinstallations requiring on-site audits, logistics and scheduling add significantlead time.

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