American companies will pay roughly $231 million this year in carbon charges on goods shipped to the European Union, according to the Niskanen Center's U.S. Carbon Exposure Calculator published this month. The fee stems from Washington's refusal to adopt a national carbon price or establish an emissions accounting system that European regulators would recognize. If current trade flows continue, the bill will exceed $250 million in 2027 and climb near $300 million in 2028, driven by the EU's escalating carbon tariff schedule.
The cost hits different industries unevenly. Iron and steel face the steepest charge at a projected $121.6 million for 2026, while fertilizers follow closely at $103.9 million—together accounting for nearly all of this year's exposure. Aluminum ($5.3 million), hydrogen ($0.4 million), and cement ($0.1 million) make up the remainder. The EU calculates these fees using two figures: a certificate price reflecting what European factories pay for their own emissions—€75.36 ($86.92) per metric tonne of CO₂ equivalent in the first quarter of 2026 and €75.28 ($86.82) in the second—and default emission values deliberately set high to encourage companies to document actual output. If U.S. exporters could verify their real emissions instead of relying on these defaults, the combined levy across all sectors would drop to roughly $55 million to $65 million, about one-fourth of the projected cost.
The gap between default charges and actual emissions is widest in iron and steel. About 90 percent of the sector's total falls on iron ore pellets, where the seven operating U.S. plants report an average emission of 0.08 tonnes of CO₂ equivalent per tonne of product to the EPA's Greenhouse Gas Reporting Program—roughly one-eighth of the EU's default rate. American steel mills face a similar disparity: 70 percent to 75 percent of U.S. steel comes from electric arc furnaces running on scrap, which emit about 0.1 tonnes of CO₂ per tonne during processing, while the EU assigns a default value over 2 tonnes per tonne—20 times higher. The report notes that European authorities slashed the markup penalty for fertilizers from 10 percent to 1 percent through 2028 because high prices raised production costs and food security worries, but U.S. shipments of ammonia, urea, ammonium nitrate, and compound fertilizers still generate nine-figure exposure.
The 2026 charges are unavoidable because third-party verifiers must be accredited specifically for this work by an EU member state's national accreditation body, and analysts say those bodies are operating at capacity—meaning even firms that already verify European emissions reports need extensions and can't process the backlog. Verification also can't start until 2026 ends, since actual values require emissions data averaged over a full calendar year and an in-person site visit, leaving only nine months before certificates are due in September 2027. Most exporters are expected to miss that window and fall back on defaults. The report says Congress has taken a first step by directing the Department of Energy's National Energy Technology Laboratory to study the carbon intensity of U.S. products covered by the EU mechanism, and recommends lawmakers go further by designating either the National Institute of Standards and Technology or the International Trade Commission to establish or endorse a single product-level emissions accounting standard that EU-accredited verifiers can accept. The bottom line: none of this money has to leave the country—the United States could collect the same revenue by pricing carbon at home or adopting measurement methods European regulators would recognize.