London, 19 September (Argus) — The European Commission will implement the bloc’s carbon border adjustment mechanism (CBAM) with default values for embedded emissions in products on 10 countries, market sources told Argus today.
It is not clear which those countries will be, but it is likely to be the 10 largest exporters into the bloc. Other countries will be provided with an average intensity based on these 10, the sources said.
A “non-discriminatory adjustment factor” will also be applied, increasing the cost of importing, some said. This is designed to encourage producers to carry out an audit process to prove that the emissions-intensity of their products is lower.
It is not clear if verification of lower emissions will be possible in 2026, how the process will function or what the authority will be.
The default values will be differentiated between blast furnaces and electric arc furnaces.
Mill executives said the benchmark value, used in the equation to determine CBAM cost, will be 1.3t for a blast furnace and around 0.2t for an electric arc furnace, in line with the EU emissions trading system.
The commission is due to adopt an implementing act before the end of the year, setting out the relevant default values.
By Colin Richardson and Victoria Hatherick
