CBAM Border Carbon Tariff Simulator

CBAM Border

Carbon price €80/t

Free allocation left 50%

Import volume 1.0x

Sector

CBAM revenue

–

Avg tariff / tonne

–

Shipments cleared

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Shipments turned back

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How it works

Each truck leaves a producer plinth on the left carrying goods (steel, cement, fertilizer or electricity) with a fixed embedded-carbon intensity — clean producers (green plinths) run on low-carbon power, dirty producers (red plinths) run on coal. At the border checkpoint the EU compares each shipment's embedded emissions to a sector benchmark, and any tonnes above the free-allocation share must be covered by a purchased CBAM certificate.

certificates = max(0, intensity − benchmark) × (1 − freeAllocation)
tariff = certificates × carbonPrice
landed cost = base cost + tariff

Carbon price — the EU ETS-linked price per tonne of CO₂ a certificate costs; higher price makes dirty imports pay more at the gate.
Free allocation left — the share of embedded emissions still exempt (phasing out toward 2034 in the real policy); at 0% the full carbon gap is charged.
Import volume — how many shipments enter the queue per minute, i.e. how much trade is flowing toward the EU border.
Sector — switches the emissions benchmark and the spread of producer carbon intensities to match real CBAM-covered goods.

A shipment whose tariff pushes its landed cost too far above a clean competitor's is turned back at the gate (it loses the sale) rather than pass through — visualising why CBAM is meant to close the loophole of "carbon leakage": importing carbon-intensive goods to dodge a domestic carbon price.

Low-carbon producer Mid-carbon producer High-carbon producer EU border checkpoint

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