CBAM Default Values: What They Are and What They Cost

Default values are pre-set emissions figures published by HMRC for every covered product. They represent the estimated embedded emissions for a product when the actual emissions data from the supplier is not available.

HMRC deliberately sets default values at a level that provides no financial advantage over using verified supplier data. In practice, this means defaults are set at the upper end of the emissions range — typically the 95th percentile or higher of actual emissions for that product type.

Using defaults is not prohibited. It is a legitimate fallback when supplier data is unavailable. But it comes at a cost: you will almost certainly pay more in CBAM liability than you would with actual data.

HMRC determines default values based on three sources:

• Global production data for each product type, drawn from industry associations and international bodies
• EU CBAM default values (which follow a similar methodology)
• Any UK-specific data HMRC collects during the initial years of the regime

The default values are reviewed periodically and may be updated as better data becomes available. HMRC has committed to publishing the methodology and data sources used.

Default values are expressed as kg CO₂ equivalent per tonne of product. They cover Scope 1 (direct emissions) and Scope 2 (indirect from electricity) separately, so you can replace one component with supplier data while using the default for the other.

The financial penalty for using defaults can be substantial. Consider a typical aluminium importer:

Using actual supplier data, embedded emissions might be 8.5 tonnes CO₂e per tonne of aluminium. Using the HMRC default value, the figure might be 12.8 tonnes CO₂e — approximately 50% higher.

At the UK CBAM carbon price (expected to align with the UK ETS auction price, approximately £40-£80 per tonne), that difference of 4.3 tonnes CO₂e per tonne of aluminium translates to £172-£344 in additional CBAM liability per tonne imported.

For an importer bringing in 100 tonnes of aluminium per quarter, using defaults could cost an additional £68,800-£137,600 per year compared to using verified supplier data.

You can use default values in three scenarios:

• No supplier data available: You have requested data and received no response
• Incomplete supplier data: You have data for some emissions scopes but not others
• Supplier data is unreliable: The data provided is clearly inconsistent or cannot be verified

You cannot use default values if:

• You have verified supplier data and are choosing to use defaults instead
• You have not made a reasonable effort to obtain supplier data
• You are using defaults to reduce your compliance burden without documenting your data collection efforts

HMRC expects to see evidence of your data collection efforts. If you are audited, you will need to show what requests you made and what responses you received.

During the first year of CBAM (2027), HMRC may adopt a transitional approach that allows greater use of default values while importers establish their data collection processes. The exact scope of this transitional leniency has not yet been confirmed.

However, relying on the transitional period is not a strategy. Establishing supplier data collection processes takes time — often 6-12 months — and you should start as early as possible. The businesses that begin collecting data in 2026 will be best positioned when the full regime applies.