CBAM Q3 2024 Compliance Update: What's Changed and What's Next

A Turning Point in the Transitional Period

The CBAM transitional period reached an important milestone in Q3 2024. As of July 31, 2024, the use of default values established by the European Commission was restricted. This limitation effectively mandates the transition to actual emissions data for exporters (Commission Implementing Regulation 2023/1773, Article 4).

Default Value Restriction: What Changed?

Until July 2024, importers could use Commission-published default values for the entirety of their embedded emissions calculations. After that date:

• Default values may only be used for a maximum of 20 percent of total embedded emissions
• The remaining 80 percent must use actual facility data or an equivalent national methodology
• Importers unable to provide any actual data must submit valid justification to the Commission

This change has a direct impact on Turkish exporters. EU importers are now requesting facility-level emissions data from their suppliers.

Improvement in Reporting Quality

Following the experience of the first two reporting periods (Q4 2023 and Q1 2024), a notable improvement in reporting quality was observed in Q3. Areas of improvement highlighted in the European Commission's transitional period assessment include:

• More importers using actual facility data
• Lower error rates in CN code matching
• Fewer technical issues with the CBAM Transitional Registry

However, the Commission noted that challenges persist, particularly in reporting indirect emissions and calculating precursor emissions for complex products (European Commission, 2024).

Situation Assessment for Turkish Exporters

Turkey is one of the EU's significant suppliers of CBAM-covered products. Turkish exporters in the iron-steel and cement sectors in particular are directly affected by the default value restriction.

The Advantage of a Proactive Approach

Suppliers who can provide actual emissions data are becoming preferred partners for EU importers. This creates a competitive advantage for Turkish exporters who prepare their emissions data proactively. The logic is straightforward: when an EU importer can choose between a supplier with verified facility data (resulting in lower reported embedded emissions) and one relying on default values (which are intentionally set above sector averages), the choice has direct financial implications for the importer's CBAM obligations.

For Turkey's steel sector, this advantage is particularly pronounced. With approximately 70 percent of production coming from electric arc furnaces (EAF), actual facility data typically shows emission intensity of 0.4-0.6 tCO2/tonne — significantly below the default value of approximately 1.3 tCO2/tonne. The difference translates directly into lower CBAM costs for EU importers who source from data-ready Turkish mills (World Steel Association, 2024).

Critical Points in Data Preparation

1. Facility-level Scope 1 emissions: Direct emissions from production processes — the core of CBAM embedded emissions calculation. Each facility must track fuel consumption, process emissions, and fugitive emissions separately.
2. Indirect emissions from electricity consumption: Mandatory for steel and aluminium under the CBAM Regulation. Turkey's grid emission factor (approximately 0.45 kgCO2/kWh) directly affects the calculation. Facilities with on-site renewable energy or documented PPAs may benefit from lower indirect emission values.
3. Precursor emissions: Emissions from inputs used in complex products — for example, pig iron used in steelmaking or clinker used in cement. Tracking precursor emissions requires data from upstream suppliers within the production chain.
4. Production method-specific parameters: Distinctions such as BOF steel vs. EAF steel, or Portland clinker vs. blended cement. These distinctions dramatically affect emission intensity calculations and must be accurately documented.

15 Months Until the Definitive Phase

When the definitive phase begins on January 1, 2026:

• Importers will be required to purchase CBAM certificates corresponding to embedded emissions
• Certificate prices will be linked to EU ETS allowance prices
• Verification of embedded emissions by accredited verifiers will become mandatory
• Carbon prices paid in the country of origin may be deducted

This 15-month window is critical for strengthening data infrastructure and preparing for verification processes (Regulation 2023/956, Article 22).

Next Steps

• The Q3 2024 report must be submitted by the end of January 2025
• Keep default value usage below 20 percent
• Standardize supplier data collection processes
• Establish early contact with verification bodies for the 2026 definitive phase

Key Takeaway: The default value restriction is designed to ensure a smooth transition from the transitional to the definitive phase. View this restriction not as a warning, but as a preparation opportunity.

See how enterprise teams manage CBAM compliance and embedded emissions reporting at scale.