← Back to Insights
Your carbon intensity is now your price.
"CBAM entered its definitive phase on January 1, 2026. For every tonne of steel, aluminium, cement, or fertilizer exported to the EU, your embedded carbon now determines your import cost. The manufacturer who cannot document its emissions is priced at the worst 10 percent of EU producers. The one who can is priced at its actual footprint. That gap is now your competitive position."
EUR 85/t
EU ETS carbon price as of April 2026. The CBAM certificate price is linked to the weekly EU ETS auction average.
(Fastmarkets, 2026)
(Fastmarkets, 2026)
20%+
Carbon surcharge as a share of export value for a steel tonne at EUR 800 with average industry emissions.
(KarbonWise, 2026)
(KarbonWise, 2026)
THE DECISION STAKES
Carbon intensity is not a disclosure metric anymore.
"Carbon intensity is no longer just a disclosure metric. It is becoming a key determinant of market access and profitability." — Fastmarkets CBAM Metals Report, February 2026
Your CBAM position is determined by the quality of your emissions documentation, not by your actual carbon intensity. A low-carbon producer with poor documentation pays the same rate as a high-carbon competitor.
The manufacturer that documents, prices, and positions its carbon intensity turns a compliance burden into a commercial differentiator. The EU market is actively rewarding verified low-carbon supply. The window to establish that position is now.
THE DECISION TOOL
Four moves. One decision you can defend.
01
MEASURE
Calculate verified embedded emissions per product at the facility level: Scope 1 (direct), Scope 2 (electricity), and upstream Scope 3 where included under CBAM. Use EU methodology, not internal reporting formats. Gap analysis vs EU default values reveals your CBAM exposure or advantage.
The measurement itself is the competitive tool. A verified 1.6 tCO2e/t vs the 12 tCO2e/t industry default is worth EUR 881 per tonne in avoided CBAM certificates at current prices.
02
DOCUMENT
Obtain third-party verification of embedded emissions using an accredited EU verifier. Build a documentation chain from energy input to finished product. EU importers need verified data that survives CBAM declarant audit. Self-reported data does not qualify.
Third-party verification is the condition for accessing the carbon credit deduction mechanism: the carbon price already paid domestically can reduce CBAM certificates owed, but only with verified documentation.
03
PRICE
Translate your verified carbon intensity into a price argument: calculate the CBAM certificate savings your buyer realizes by sourcing from you vs the industry average. At EUR 85/t, the difference between 2 tCO2e/t and 12 tCO2e/t is EUR 850 per tonne your buyer does not pay.
The low-carbon supplier can share the CBAM savings with the buyer as a pricing argument. A premium of EUR 100 per tonne is still EUR 750 per tonne cheaper for the buyer than the high-carbon alternative.
04
POSITION
Build carbon intensity into your commercial positioning: EU market access documentation, procurement responses, sustainability-linked contracts, and investor communications. CBAM scope is expanding: 180 downstream steel and aluminium products are proposed for 2028. Position now for the full trajectory.
The manufacturer positioned as a verified low-carbon supplier before 2026 builds a supply chain relationship that compounds as CBAM costs rise. Every EUR increase in the ETS price increases the value of the position.
Rio Tinto Aluminium
AP60 smelter, Complexe Jonquiere, Quebec. Hydropower. Expanding capacity +160,000 tonnes/year. USD 1.1bn investment.
1/7
Of the industry-average greenhouse gas emissions per tonne of aluminium, produced by Rio Tinto's AP60 technology powered by Quebec hydroelectricity. AP60: approximately 1.6 tCO2e/t vs over 12 tCO2e/t for the industry average.
(Rio Tinto, June 2023; Fastmarkets interview, March 2026)
Rio Tinto's AP60 smelter in Quebec produces some of the lowest-carbon primary aluminium in the world: 1.6 tCO2e per tonne, powered by renewable hydroelectricity. At the current EU ETS price of EUR 85/t, an EU importer sourcing AP60 aluminium pays approximately EUR 136 in CBAM certificates per tonne. An importer sourcing from the industry average would pay over EUR 1,000. The CBAM differential: EUR 880 per tonne. Rio Tinto is expanding AP60 capacity by 160,000 tonnes annually and is the first to deploy the technology outside Canada, in Finland. The carbon intensity is not a sustainability claim. It is a pricing instrument.
Rio Tinto did not build AP60 for CBAM. But AP60 is now worth EUR 880 per tonne in CBAM advantage. Low-carbon investment made before the regulation pays compounding dividends as the carbon price rises.
Download the full case
PDF · 5 slides · Free access · Downloaded 0 times
Key questions
How much of your verified emissions advantage is currently invisible to EU buyers because your documentation does not meet the standard their CBAM declarant requires?
At what carbon intensity differential does it become commercially viable to co-invest in supplier decarbonization rather than switch to a lower-carbon alternative supplier?
When CBAM expands to cover 180 downstream products in 2028, which of your current non-covered product lines should be positioned now before that expansion creates urgency without preparation time?
Pre-decision checklist
MEASURE — completed
DOCUMENT — completed
PRICE — completed
POSITION — completed
By Fabrice Macarty
This case resonates?
Measure your verified embedded emissions using EU methodology. Get third-party verification before the next EU shipment. Price your CBAM advantage into your commercial terms. Position your carbon intensity as a market access argument now.
Start the conversation