{"id":52606,"date":"2026-01-01T16:37:45","date_gmt":"2026-01-01T10:37:45","guid":{"rendered":"https:\/\/biztrend24.com\/?p=52606"},"modified":"2026-01-01T16:37:45","modified_gmt":"2026-01-01T10:37:45","slug":"welcome-2026-the-year-of-cbam-uncertainty-and-trade-conflicts","status":"publish","type":"post","link":"https:\/\/biztrend24.com\/?p=52606&lang=en","title":{"rendered":"Welcome 2026 &#8211; The year of CBAM, uncertainty and trade conflicts"},"content":{"rendered":"<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Leaked default values highly punishing for exporters<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>India&#8217;s specific default factor one of the highest globally<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>EC to start emission data verification from 2027<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Morning Brief:\u00a0As the global steel industry enters 2026 and, importantly, the definitive stage of the Carbon Border Adjustment Mechanism (CBAM) of the European Union, a new wave of confusion and uncertainty has gripped the industry. Overall uncertainty and alarm has been reinforced after the leaked draft implementing regulation on CBAM verification surfaced recently.<\/p>\n<p>Notably, details have emerged regarding the calculation of free allocation adjustments, featuring preliminary CBAM benchmarks and a new set of country-specific default values. These default values will be essential for CBAM reporting when importers lack access to verified data from their suppliers.<\/p>\n<p>&#8220;New provisional CBAM documents indicate severe cost exposure for Indian steel exports if default values are used instead of verified emissions data,&#8221; the owner of a leading Bangalore-based climate analytics and data services provider informed BigMint.<\/p>\n<p>What are default values?<\/p>\n<p>In accordance with Article 7 of Regulation (EU) 2023\/956, default values are to be determined based on the most up-to-date and reliable information. In the event that neither data obtained by the Joint Research Centre nor data collected during the transitional period is considered sufficiently reliable, the default values should be based on the average of the 10 exporting countries with the highest emission intensities for which reliable data can be applied for that type of goods.<\/p>\n<p>These values are based on the average emission intensity for a product from a particular country and are further increased by a mark-up before use. CBAM benchmarks are derived from ETS benchmarks, and are multiplied by a &#8216;CBAM factor&#8217; that increases CBAM liabilities as ETS free allocations are phased-out at an increasing rate between 2026-2034. According to reports, the CBAM factor starts at 97.5% in 2026.<\/p>\n<p>CBAM default benchmarks are split by production route, in view of the independent emissions profiles of BF-BOF, DRI-EAF, and scrap-EAF. Some &#8216;actual&#8217; benchmarks, namely those relating to semi-finished steel products, are also split by production route.<\/p>\n<p>Why are defaults punitive?<\/p>\n<p>However, despite the technology- and route-wise split, the vast majority of countries have been assigned benchmark classifications of BF-BOF for their steel products, which means that they must use BF-BOF benchmarks when calculating CBAM costs on default values, irrespective of the actual production route of the imported product.<\/p>\n<p>According to a McCloskey report, (Default) values make assumptions as to the carbon embedded in an origins steel products, and include a punitive element to incentivise the disclosure and use of actual values. The Commission has introduced a gradual phase-in for the punitive mark-up of steel products, starting at 10% in 2026; then 20% in 2027; and at 30% from 2028.<\/p>\n<p>Switching from default values to actual data yields greater cost reductions for Indian exports. This is primarily because the uniform mark-up leads to a higher penalty for countries with greater underlying emission intensities. For Indian suppliers, the national average (4.32 tCO2\/t) remains well above the CBAM benchmark (1.543 tCO2\/t).<\/p>\n<p>Key takeaway:<\/p>\n<p>&#8220;Without plant-level MRV and verified actual values, Indian mills risk systematic overpayment under CBAM, regardless of how efficient their operations actually are,&#8221; an executive with a top Indian climate consultancy and MRV firm told BigMint.<\/p>\n<p>The feasibility and cost of reporting actual emissions will depend on verification standards and acceptable methodologies. Verification rules were released by the EC earlier in November, essentially imposing strict ETS-level criteria for third country installations to account, process, and subsequently verify their emissions data.<\/p>\n<p>Verifications will commence from 2027, requiring emissions data averaged across 2026, meaning accredited verifiers cannot conduct necessary site visits or substantive verification activities until 2026 concludes.<\/p>\n<p>Moreover, alignment of country-level actual data tracking methodologies or EPDs with EU CBAM methodology is obviously going to be difficult and cumbersome, if at all possible. The result: further uncertainty ahead.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Leaked default values highly punishing for exporters India&#8217;s specific default factor one of the highest&#8230;<\/p>\n","protected":false},"author":1,"featured_media":52607,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[313],"tags":[],"class_list":["post-52606","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-iron-steel"],"jetpack_publicize_connections":[],"featured_image_urls":{"full":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=1280%2C720&ssl=1?v=1767263858",1280,720,false],"thumbnail":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?resize=150%2C150&ssl=1?v=1767263858",150,150,true],"medium":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=300%2C169&ssl=1?v=1767263858",300,169,true],"medium_large":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=640%2C360&ssl=1?v=1767263858",640,360,true],"large":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=640%2C360&ssl=1?v=1767263858",640,360,true],"1536x1536":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=1280%2C720&ssl=1?v=1767263858",1280,720,true],"2048x2048":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=1280%2C720&ssl=1?v=1767263858",1280,720,true],"covernews-slider-full":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?resize=1115%2C715&ssl=1?v=1767263858",1115,715,true],"covernews-slider-center":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?resize=800%2C500&ssl=1?v=1767263858",800,500,true],"covernews-featured":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=1024%2C576&ssl=1?v=1767263858",1024,576,true],"covernews-medium":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?resize=540%2C340&ssl=1?v=1767263858",540,340,true],"covernews-medium-square":["https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?resize=400%2C250&ssl=1?v=1767263858",400,250,true]},"author_info":{"display_name":"Biz Trend 24","author_link":"https:\/\/biztrend24.com\/author\/online24"},"category_info":"<a href=\"https:\/\/biztrend24.com\/?cat=313&#038;lang=en\" rel=\"category\">Iron &amp; Steel<\/a>","tag_info":"Iron &amp; Steel","comment_count":0,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-01T163704.376.jpg?fit=1280%2C720&ssl=1?v=1767263858","jetpack-related-posts":[{"id":58939,"url":"https:\/\/biztrend24.com\/?p=58939&lang=en","url_meta":{"origin":52606,"position":0},"title":"How will global trade uncertainties, price volatility affect Indian ferro chrome industry in CY&#8217;26?","author":"Biz Trend 24","date":"March 1, 2026","format":false,"excerpt":"Tight margins, shrinking exports impact ferro chrome production in CY'25 CBAM threatens sustained access to the high-profit EU market With S. 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shipments hit 4-year high in H2","author":"Biz Trend 24","date":"January 22, 2026","format":false,"excerpt":"Finished flats exports dip 1%, semis surge 48% on US, UK intake Exports to EU slide by 7% despite sharp CBAM-driven rebound in H2 Indian exporters target Vietnam as demand from EU starts to wane Morning Brief:\u00a0India's steel exports (including stainless steel) climbed up by 4% y-o-y to 8.59 million\u2026","rel":"","context":"In &quot;Iron &amp; Steel&quot;","block_context":{"text":"Iron &amp; Steel","link":"https:\/\/biztrend24.com\/?cat=313&lang=en"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-22T145155.054.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-22T145155.054.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-22T145155.054.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-22T145155.054.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/biztrend24.com\/wp-content\/uploads\/2026\/01\/Untitled-design-2026-01-22T145155.054.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/biztrend24.com\/index.php?rest_route=\/wp\/v2\/posts\/52606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/biztrend24.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/biztrend24.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/biztrend24.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/biztrend24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=52606"}],"version-history":[{"count":1,"href":"https:\/\/biztrend24.com\/index.php?rest_route=\/wp\/v2\/posts\/52606\/revisions"}],"predecessor-version":[{"id":52608,"href":"https:\/\/biztrend24.com\/index.php?rest_route=\/wp\/v2\/posts\/52606\/revisions\/52608"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/biztrend24.com\/index.php?rest_route=\/wp\/v2\/media\/52607"}],"wp:attachment":[{"href":"https:\/\/biztrend24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=52606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/biztrend24.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=52606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/biztrend24.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=52606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}