Our take on the implications
These detailed rules are crucial updates to prepare enterprises for the official start of CBAM on 1 January 2026, and covered major aspects related to the implementation and technical guidance on data reporting and verification etc. These, however, have less direct impacts on the EU ETS market. The rule related to the deduction of carbon price paid in third countries is still missing and expected to be released in Q1 2026. The proposal, however, mentioned the potential use of Article 6 credits in the accounting of carbon price paid abroad.
The documents provide an important clarification on the CBAM benchmarks used in free allocation adjustment. Overall, the CBAM benchmarks shall be based on ETS benchmarks for 2026 to 2030. Since ETS benchmarks will only be available in early 2026, the CBAM benchmarks in 2026 shall be based on the ‘estimated 2026-2030 ETS benchmarks’. These estimates shall later be reviewed at least one month after the ‘final ETS benchmarks’ are published, expected in Q1 2026. Thereafter, the updated and final ETS benchmarks for 2026 to 2030 shall apply to goods imported from 1 January 2027.
The released Default values by country are broadly higher than benchmarks with rising mark-ups in the next three years, reflecting the objective of being punitive, putting pressure on enterprises to track actual embedded emissions. Some producers have expressed that they can only rely on default values at this stage, with verification work not yet starting. Hence, the combination of the decline in 2026 CBAM benchmarks and likely higher share of default values means a slightly increased level of CBAM costs for some exporters into the EU.
The formula to calculate the CBAM certificate price is in line with earlier leaks, and it will be based on EUA daily auction clearing prices weighted by the volumes. For 2026 compliance, the Commission shall calculate the quarterly average during the first calendar week of the following quarter. From 2027, the calculation shall switch to weekly average.
Highlights from the two new CBAM Proposals
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Proposal to expand the scope of CBAM to certain downstream goods and anti-circumvention measures
The Commission published a proposal to extend the scope to selected steel and aluminium-intensive downstream products. in line with the commitment in the ‘European Steel and Metals Action Plan'. In total, 180 downstream products are added to the scope of CBAM (around 7,500 additional importers), based on two indicators: trade intensity and cost push. Examples of affected sectors include machinery, hardware and fabrications, vehicle components, domestic appliances and construction equipment. The proposed list also includes more complicated goods based on multiple CBAM inputs, such as washing machines, which consist of around 60% steel, 5% aluminium and 5% cement. On the anti-circumvention measures, the Commission proposes to include pre-consumer metals scrap (i.e. materials discarded before reaching consumers) as a CBAM precursor.
It specifies ‘To facilitate the application of Regulation (EU) 2023/956, the Union may in the context of the Implementing Regulation for accounting the carbon price paid abroad, consider the carbon credits under Article 6 of the Paris Agreement.’
Furthermore, it proposes to amend the emissions factor for imported electricity to the average emission intensity of all sources of electricity, from the previous method of only fossil sources. The Commission will revise and publish new default values.
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Proposal to establish the Temporary Decarbonisation Fund
This proposal follows the July communication on the plan to mitigate carbon leakage risk for exporters.
The Commission proposes to establish a Fund financed by Member State contributions, amounting to 25% of the revenues generated from the sale of CBAM certificates to authorised CBAM declarants established in their territory, as of 1 February 2027. The Fund will provide temporary decarbonisation support to EU producers of certain CBAM goods in order to mitigate their continued exposure to carbon leakage risks. Specifically, it will reimburse eligible producers for part of the EU ETS carbon costs incurred in the production of goods that remain exposed to carbon leakage. To qualify for support, EU producers will be required to demonstrate concrete decarbonisation efforts. Eligibility criteria will build on existing carbon leakage assessments previously applied in the context of free allocation under the EU ETS. The Fund is intended to provide financial support in 2028 and 2029, with beneficiaries’ exposure to residual carbon leakage risk determined on the basis of a two-year production reference period covering 2026–2027.
ClearBlue's EU Market Intelligence team will continue following CBAM developments and inform their clients accordingly. Contact us for more information.