CBAM Default Values & 10% Markup Scrapped: 2026 Switch to Verified Emissions for China Steel & Aluminium Importers

The Looming CBAM Shift: From Estimates to Actuals for China Steel & Aluminium Imports

The Carbon Border Adjustment Mechanism (CBAM) is undergoing a significant evolution, and for EU importers of Chinese steel and aluminium, the changes arriving in 2026 are crucial. Gone will be the days of relying on default emissions values and a flat 10% markup. By 2026, the EU will mandate the use of verified, actual emissions data for covered goods. This seismic shift demands immediate preparation to avoid compliance failures, unexpected costs, and trade disruptions.

This article details the upcoming changes, why they matter, and how EU businesses can proactively adapt. We'll explore the implications for your landed costs, the importance of verified data, and how Cargoo Import can guide you through this complex transition.

Why Import Steel & Aluminium from China?

Despite increasing regulatory scrutiny, China remains a dominant global supplier of steel and aluminium products. Factors contributing to this include:

• Scale and Capacity: China possesses vast manufacturing capabilities, enabling large-scale production and potentially competitive pricing.
• Established Supply Chains: Decades of export have led to well-developed logistics and production networks.
• Specialised Products: Certain niche or high-volume steel and aluminium components are often most readily available from Chinese manufacturers.

However, the landscape is rapidly changing. New regulations, including CBAM, the EU ETS shipping surcharge, and evolving customs valuation rules, are fundamentally altering the cost and complexity of importing from China. Understanding these impacts is paramount for continued profitability and compliance. For instance, the proposed EU ETS shipping surcharge, set for 100% phase-in for China imports by 2026, will directly affect landed costs and necessitates recalculating your cost base, as highlighted in our analysis of the EU ETS Shipping Surcharge 2026.

The Shift Away from CBAM Default Values: What You Need to Know

Currently, CBAM allows importers to use default emissions values – often provided by the EU Commission – and a standard 10% markup for calculating the embedded emissions of imported goods. This approach has provided a temporary bridge for businesses to adapt. However, the EU Commission is phasing this out.

Key Changes for 2026:

• Mandatory Verified Actual Emissions: Importers will be required to declare and use the actual greenhouse gas emissions of the goods produced in China. This data must be verified by an accredited verifier in the country of origin.
• Elimination of Default Values: The simplified default values will no longer be permissible for most goods.
• Scrapping of the 10% Markup: The arbitrary 10% markup, used to account for additional emissions not captured by default values, will also be removed.

This means the declared embedded emissions will more accurately reflect the true carbon footprint of the imported products, leading to a potentially more accurate, but also potentially higher, CBAM obligation. The European Commission has been clear in its communications about the progressive nature of CBAM, moving towards greater precision and accountability.

What This Means for HS Codes:

This change directly impacts specific Harmonised System (HS) codes. For example, within Chapter 72 (Iron and Steel) and Chapter 76 (Aluminium and articles thereof), the emissions intensity can vary significantly based on the specific production process and origin within China. HS codes like 7207 11 (Semi-finished products of iron or non-alloy steel, containing by weight less than 0.25% of carbon, not further worked than hot-rolled or extruded) will now require precise, verified data, rather than broad default figures.

A Worked Example (Illustrative):

Let’s consider importing 1 tonne of aluminium profiles (e.g., HS Code 7604.29.90).

• Current Scenario (using defaults): Assume a default emissions intensity of 15 tonnes CO2e/tonne aluminium, and the 10% markup. Total emissions declared = 15 * 1.10 = 16.5 tonnes CO2e.
• 2026 Scenario (verified data): Your Chinese supplier provides verified data showing actual production emissions of 18 tonnes CO2e/tonne aluminium. Total emissions declared = 18 tonnes CO2e.

If the CBAM carbon price is €75/tonne CO2e, the CBAM obligation could shift from €1,237.50 (€75 * 16.5) to €1,350 (€75 * 18) per tonne – an increase of over 9% purely due to the shift from defaults to verified data.

The Crucial Role of Verified Emissions Data

Obtaining accurate, verified emissions data from Chinese suppliers is the central challenge and opportunity presented by the 2026 CBAM changes. This requires:

1. Supplier Engagement: You must work closely with your Chinese manufacturers to ensure they understand the requirements and are willing and able to provide the necessary data.
2. Data Verification: This data must be independently verified by an accredited verifier operating under EU-accredited standards. This process adds a layer of cost and time.
3. Documentation: Robust documentation proving the origin of the data and the verification process will be essential for customs declarations.

This transition underscores the need for enhanced due diligence throughout your supply chain. It’s no longer sufficient to rely on ex-works pricing and standard shipping documents. Understanding the ‘upstream’ environmental impact of your products is now a regulatory necessity. This aligns with broader EU trends, such as the upcoming PPWR Packaging Compliance Checklist and the EUDR 2026 for Wood Furniture & Plywood, which also demand greater transparency and verifiable data.

Logistics & Shipping to the EU

Efficient logistics are key to managing landed costs. When importing steel and aluminium from China, common shipping methods include:

• Sea Freight: The most cost-effective for bulk quantities, with transit times typically ranging from 30-45 days to major EU ports.
• Rail Freight: A faster alternative, often used for time-sensitive shipments, with transit times around 18-22 days. This can be a good option for balancing speed and cost, especially with the increasing focus on emissions reduction.
• Air Freight: The fastest but most expensive option, suitable for extremely urgent or high-value, low-volume items. Transit times are usually 5-8 days.

Choosing the right Incoterm is also critical. While EXW (Ex Works) places the most responsibility on the importer, DDP (Delivered Duty Paid) includes all costs, including duties and taxes, simplifying the process but potentially at a higher upfront cost. Understanding the nuances between FOB vs EXW vs DDP is vital for accurate cost calculation and risk management.

Customs & Duties: A Complex Web

Navigating EU customs for Chinese imports involves several layers of charges:

• Customs Duties: Tariffs vary based on the product's HS code. For example, basic steel products might face duties ranging from 0% to over 20%, while aluminium products have their own specific rates. Be aware of potential anti-dumping duties, which can significantly increase costs, as detailed in our guide to the EU Anti-Dumping Duty TARIC Additional Code Trap. The EU Steel Safeguard Quota also introduces complexities, with doubled duties potentially applying if quotas are exceeded, as noted in the EU Steel Safeguard Quota Cut July 2026.
• CBAM Obligation: As discussed, this will transition to verified actual emissions data in 2026.
• EU VAT: Standard EU VAT rates apply, varying by member state (e.g., Poland ~23%, Germany 19%, France 20%). VAT is typically calculated on the customs value (including duties and transport costs).
• Other Fees: Expect potential customs handling fees, particularly for lower-value shipments, as regulations around the EU Customs Handling Fee November 2026 evolve.

Crucially, the €150 EU customs duty exemption is ending in 2026. This means B2B imports, regardless of value, will be subject to customs declarations and duties/taxes, potentially adding a €3 flat fee on top of other charges. This significantly impacts landed costs for smaller consignments.

**Landed Cost Example (Illustrative - 1 Tonne Steel Product):

• Product Cost (EXW China): €800
• China-EU Freight (Sea): €150
• Insurance: €10
• EU Customs Duty (hypothetical 5%): €42.50 ((€800+€150+€10) * 0.05)
• CBAM Obligation (verified, hypothetical): €300 (calculated based on actual emissions and carbon price)
• Total Before VAT: €1302.50
• EU VAT (e.g., German 19%): €247.48 (€1302.50 * 0.19)
• Estimated Landed Cost: €1549.98

This example highlights how multiple charges contribute to the final cost. The move to verified emissions under CBAM will necessitate precise calculations.

How Cargoo Can Help You Navigate 2026 Changes

The upcoming CBAM transition, coupled with other regulatory shifts like the end of the €150 duty exemption and the EU ETS shipping surcharge, presents significant compliance challenges for EU importers. At Cargoo Import, we specialize in demystifying these complexities and ensuring smooth, compliant imports from China.

We can assist you by:

• Supplier Vetting: Helping you identify and partner with Chinese suppliers capable of providing the verified emissions data required for CBAM.
• Logistics Optimisation: Finding the most cost-effective and timely shipping solutions, whether by sea, rail, or air.
• Customs Brokerage: Managing all aspects of customs clearance, ensuring accurate declarations for duties, VAT, and CBAM obligations.
• Compliance Guidance: Keeping you informed about evolving EU regulations and advising on necessary steps to maintain compliance.

Don't wait for 2026 to approach. Proactive planning is essential. Contact Cargoo Import today to discuss your specific needs and ensure your steel and aluminium imports from China remain compliant and competitive in the new regulatory era.