CBAM Hits €82.32: Why Thai Default Values Miss the 2.5% Relief

On 5 October 2026 the European Commission published the third CBAM certificate price of the year: €82.32 per tonne of CO2 equivalent for goods imported into the EU between July and September. That is 9.4% higher than the second-quarter price of €75.28. Steel and aluminium shipped from Thailand in the third quarter will be costed at the higher figure.

Nobody pays yet. Certificates go on sale in February 2027. But EU buyers are already pricing 2026 contracts, and many are using a comforting rule of thumb: in 2026, importers pay on only about 2.5% of embedded emissions. For Thai goods declared on the EU’s default values, that rule of thumb is wrong. The free-allocation relief is calculated from a benchmark tied to the production route the EU assumes for Thailand, and for Thai steel that benchmark is very small.

Three prices, and the rule behind them

For 2026 only, the price is set per quarter. Article 21(1a) of the CBAM Regulation, inserted by Regulation (EU) 2025/2083, prices the certificates for 2026 emissions at the quarterly average of EU ETS auction prices “of the quarter of importation of the goods in which those emissions are embedded.” The quarter in which goods cross the EU border therefore fixes their price.

Source: European Commission, “Price of CBAM certificates”, read 7 October 2026. From 2027 the Commission moves to weekly prices.

Who pays, and when the bill arrives

The legal payer is the EU importer, the authorised CBAM declarant, not the Thai producer. Importers bringing in 50 tonnes or less of CBAM goods a year are exempt. Under the amended Regulation, certificates are sold on a common central platform from 1 February 2027, and the declarant must file the annual declaration for 2026 imports and surrender certificates by 30 September 2027.

The cost still reaches Thai exporters. An EU buyer facing a certificate bill will ask its supplier for emissions data that lowers it, or for a price that absorbs it. Our earlier pieces on CBAM for Thai exporters and on the first verification of a Thai installation cover the process. This post is about the number.

Why the 2.5% figure does not reach Thai defaults

Importers do not pay on all embedded emissions. The obligation is reduced by a free-allocation adjustment, which mirrors the free allowances EU producers still receive. In 2026 the CBAM factor in Article 10a(1a) of the EU ETS Directive is 97.5%, falling to 95% in 2027, 90% in 2028, 77.5% in 2029 and 51.5% in 2030.

The 97.5% does not apply to your emissions. It applies to a CBAM benchmark, set per CN code and production route in Implementing Regulation (EU) 2025/2620. The adjustment is roughly 97.5% of the benchmark multiplied by the tonnes imported. A producer whose emissions sit at its benchmark pays on about 2.5%. A producer far above its benchmark pays on almost everything above it.

Where default values are used, Regulation 2025/2620 says “the same production route shall be used as indicated in Annex I to … Implementing Regulation (EU) 2025/2621 for the country of origin.” For Thailand that annex assigns steel products to route (E), scrap-based electric arc furnace, and unwrought aluminium to route (L), secondary aluminium. Those routes have the smallest benchmarks in the tables:

Defaults: Implementing Regulation (EU) 2025/2621, Annex I (Thailand), as replaced by Implementing Regulation (EU) 2026/1740, which applies from 1 January 2026. Benchmarks: Implementing Regulation (EU) 2025/2620, Column B, matched to the Commission’s benchmark file.

What a tonne of Thai steel costs on defaults

Putting the pieces together gives a cost per tonne for goods imported in 2026 on default values. These are our own calculations. They add the 10% mark-up for 2026, subtract 97.5% of the benchmark, and assume a cross-sectoral correction factor of 1, which the regulation leaves to be applied but does not state. A factor below 1 would make each figure slightly higher.

Othello calculation, 7 October 2026. Tonnes are tCO2e per tonne of goods. Not legal advice; a declarant’s actual figure depends on its CN codes, data and the correction factor.

For scale, we divided these costs by the average EU import value per tonne from Thailand in 2025, using Eurostat Comext data. The cost comes to about 31% of the value of a tonne of hot-rolled flat steel (about €534 a tonne) and about 13% for fasteners (about €1,604 a tonne). That is our analysis, not an EU statistic, and 2026 prices differ. The point is the order of magnitude: on defaults, CBAM is not a rounding error for low-value steel.

Defaults get dearer every year

Default values are lawful and require no verification, so many importers will use them. They carry a mark-up that rises each year. Regulation 2026/1740 states: “For goods in the cement, iron and steel, aluminium and hydrogen sectors, the mark-up shall be 10 % for the year 2026, 20 % for the year 2027 and 30 % for the year 2028 and onwards.” Fertilisers carry 1%.

The relief shrinks at the same time. The CBAM factor falls from 97.5% to 95% in 2027 and 90% in 2028, which affects Thai default-value goods only a little because their benchmarks are already small. The mark-up is what makes defaults more expensive each year. The same regulation also changed the published tables: the old columns with the mark-up built in were deleted, and the mark-up is now applied to the total. For Thai CN 7208 the result barely moves (2.111 in the old column, 2.112 now), but anyone costing from early-2026 tables should check every line against the current ones.

Actual data is written in English

The alternative to defaults is the producer’s own verified emissions. Whether that lowers the bill depends on the plant: a Thai mill whose real emissions are below the default saves the difference and the mark-up, and one above it does not. That comparison needs real installation data, and we will not guess it here.

What is certain is the language. Commission Implementing Regulation (EU) 2025/2547 states that “the monitoring plan shall be submitted in English” (Article 5(6)) and that “the operator’s emissions report shall be submitted in English” (Article 10(4)). Those two documents carry the numbers that replace the defaults, and the EU-accredited verifier and the importer read them in English. A TGO organisational or product footprint is not a CBAM report, because CBAM follows EU ETS rules per production process. A plant with a TGO-certified carbon inventory already has much of the underlying data. Our guide to the English emissions report explains what has to be rebuilt.

The same English record is read elsewhere. FTSE Russell scores from public disclosure without a questionnaire, and its FAQ (v1.5, §1.8) lists six key research languages; Thai is not among them. An accurate English edition is the one a global analyst or EU buyer is most likely to read. That is a reason to control its accuracy. It does not mean the English edition decides the score.

Where the evidence runs out

• The correction factor is not in the regulation. Our figures assume 1. A different value changes them slightly.
• The Q4 price is unknown until 4 January 2027, and EU carbon prices can fall as well as rise.
• The deduction for carbon prices paid abroad (Article 9) still has no adopted implementing act. Thailand has no carbon price on industrial process emissions that would qualify, so we assume nothing is deducted.
• Thailand’s exposure is small overall. Thai exports of CBAM goods to the EU were US$363.93 million in the first ten months of 2025, about 0.13% of all Thai exports (Ministry of Commerce TPSO). The risk is concentrated in particular firms and products, not across the economy.
• The defaults will be reviewed. Regulation 2025/2621 says default values and mark-ups “shall be revised by December 2027 at the latest”, so the Thai values and their routes may change.

A costing checklist for Q4

The Q3 price confirms that CBAM is a real cost for Thai steel in 2026, and the relief most people quote does not reach default-value goods. Start with technical translation built for regulated filings, read about the risks in ESG translation, and follow the deadlines on our regulatory tracker →

Sources, read 7 October 2026: European Commission, Price of CBAM certificates; Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083 (Arts 20(1), 21(1a), recital 15); Directive 2003/87/EC Art 10a(1a); Implementing Regulation (EU) 2025/2620 (CBAM benchmarks, Annex point 5.1, Column B) and the Commission benchmark file; Implementing Regulation (EU) 2025/2621 Annex I (Thailand) as replaced by Implementing Regulation (EU) 2026/1740; Implementing Regulation (EU) 2025/2547 Arts 5(6) and 10(4); European Commission Have Your Say, Article 9 initiative; TPSO, Ministry of Commerce, report of 8 January 2026; Eurostat Comext DS-045409 (Othello analysis); FTSE Russell ESG Scores FAQ v1.5 §1.8; SteelOrbis, 5 October 2026.