New CAKE tool CBAM Explorer is available on our website!

New CAKE tool CBAM Explorer is available on our website!

New CAKE tool CBAM Explorer is available on our website!

The CBAM (Carbon Border Adjustment Mechanism) is a European Union mechanism that imposes a levy on CO₂ emissions embedded in imported goods. Its aim is to level the playing field in terms of emission costs between producers operating within the European Union and those outside the EU, and to limit the phenomenon known as ‘carbon leakage’. This mechanism could also become a significant source of budgetary revenue at EU level. Given that part of this revenue (25%) is planned to be allocated to the Temporary Decarbonisation Fund, a transitional EU instrument, the CBAM Explorer has been developed to enable analysis of this revenue across various scenarios. The tool was developed as part of the LIFE ENSPIRE project. It presents results for all EU Member States for the years 2026-2027.

• Link to the CBAM Explorerhttps: CBAM Explorer – CAKE

In simple terms, the explorer works in three steps. First, it uses data on imports of CBAM-covered goods into individual EU countries in 2025 and extrapolates these figures to the years 2026-2027 based on the European Commission’s macroeconomic forecasts. Next, default values of emission factors, relevant ETS benchmarks and assumptions regarding the effective emission price in the country of origin are assigned to each group of goods and country of origin. On this basis, embedded emissions and emissions subject to CBAM are determined. In the next step, given the prices of emission allowances in the EU ETS, the level of charges and the corresponding simulated revenues are calculated. Additionally, the tool allows users to check how the results change under different assumptions regarding the extent to which CBAM costs are passed on to import prices and the response of imports to increases in these prices.

Objectives of the tool

The CBAM Explorer is a tool designed to analyse the potential revenue generated by the CBAM mechanism and the factors influencing its level. Its main objectives include:

• analysis of CBAM revenues at EU and national level,
• analysis of the impact of EU ETS allowance prices, the extent to which CBAM costs are passed on to import prices, and importers’ responses to increases in these prices,
• comparison of results across EU Member States, product groups and countries of origin of imports,
• demonstrating the scale of potential costs and revenues associated with CBAM from the perspective of the EU and individual Member States.

The results are presented in the form of tables and visualisations, making it easy to compare scenarios and identify the key factors affecting workload and revenue levels.

How to interpret the results

The estimates are based on default values of emission factors rather than actual, verified emissions for specific installations. This means that using actual emissions instead of default values may result in lower CBAM charges. The level of simulated revenue is heavily dependent on:

• EU ETS allowance prices,
• the volume and structure of imports,
• product emissions,
• the assumptions made regarding the pass-through of CBAM costs to import prices and importers’ response to price increases.

In practice, the results based on default assumptions regarding the import response should be interpreted as an upper bound rather than a central estimate. A stronger import response to the increase in CBAM costs may lead to lower values.

Limitations

When interpreting the results, it is worth bearing in mind that:

• the forecast is short-term in nature and covers the years 2026-2027,
• the calculations are based on import data from 2025 and their updates for the years 2026-2027, assuming that the import structure remains unchanged from 2025, although in practice this structure may change under the influence of CBAM and market conditions,
• the calculation uses default emission values rather than actual, verified emissions reported by importers, which are not yet available,
• the module modelling the response of imports to rising costs is simplified and is used for sensitivity analysis,
• the tool covers only the current scope of the CBAM,
• the tool does not take into account the simplifications provided for in the Omnibus package, including the exemption threshold for importers of less than 50 tonnes of CBAM-covered goods per year.

The CBAM Explorer is primarily used to compare scenarios and identify factors influencing the level of costs and revenues associated with the CBAM mechanism.