European companies importing steel, aluminium, fertilisers and other goods covered by the Carbon Border Adjustment Mechanism (CBAM) face two separate uncertainties when forecasting compliance costs. These relate to movements in EU carbon certificate prices and to possible changes in the phase-out of free emissions allowances for European industry under the EU Emissions Trading System (EU ETS). Importers are required to treat these elements as distinct inputs when planning future expenditure.
The European Commission reported that the CBAM certificate price reached €82.32 per tonne of CO₂ equivalent (tCO₂e) for the third quarter of 2026, compared with €75.28 in the second quarter. The quarter-on-quarter increase was approximately 9.4%. In parallel, a separate Commission proposal could slow the withdrawal of free allocation under the EU ETS, which would change the adjustment used to calculate importers’ carbon liabilities if adopted.
CBAM certificate price timing and 2027 shift in calculation frequency
The Commission published the third-quarter 2026 CBAM certificate price on October 5, 2026. Under the pricing framework in force, the relevant quarterly price corresponds to the quarter in which goods entered the EU. This links the import period to the certificate price used for valuation.
A scheduled change for 2027 will move CBAM certificate pricing from quarterly to weekly calculations. This is expected to affect how importers manage timing between customs clearance, certificate purchases and financial settlement. Businesses will need to account for differences in when prices are determined relative to import events.
The first purchases of CBAM certificates are scheduled to begin in February 2027. The first annual declaration and certificate surrender covering imports made during 2026 must be completed by September 30, 2027. The gap between importing goods and buying certificates creates working-capital and accounting considerations for companies.
Commercial invoices may be paid months before the corresponding carbon certificates are acquired. As a result, importers may need to estimate and manage liabilities before final settlement based on later certificate purchases and surrender requirements.
EU ETS reform proposal could alter CBAM free-allocation adjustment
Under legislation currently applicable, the CBAM factor used in the free-allocation adjustment is set at 97.5% for 2026. It falls to 95% in 2027, 90% in 2028 and 51.5% in 2030, with complete withdrawal of free allocation scheduled for 2034. These factors determine how free allocation is reflected through an adjustment mechanism.
The European Commission’s broader EU ETS revision proposal COM(2026)616, published in July 2026, would change this trajectory if enacted. The proposed CBAM factors are 91.5% in 2028, 81% in 2029 and 59% in 2030, with complete removal of free allocation extended until 2038. The figures remain proposals rather than rules already in force.
Importers preparing commercial agreements are therefore expected to distinguish between the existing legislative baseline and a separate scenario reflecting COM(2026)616 if it becomes law. The annual CBAM factor alone does not determine how many certificates are required for an imported product.
Product-specific benchmark calculations, the relevant production route and eligible deductions also affect final obligations. Applying an annual phase-in percentage directly to total embedded emissions without following the applicable methodology can lead to an incorrect liability estimate.
Emissions methodology and default values shape certificate requirements
The number of certificates required depends on emissions calculations rather than certificate prices alone. In a hypothetical example where the applicable CBAM methodology yields 1.0 tonne of net chargeable emissions per tonne of imported goods, gross certificate exposure at the third-quarter 2026 price of €82.32/tCO₂e would be €82.32 per tonne of goods.
If net chargeable emissions were instead calculated at 0.4 tCO₂e per tonne of goods, exposure would be €32.93 per tonne of goods at the same certificate price level. These examples illustrate how calculated chargeable emissions determine gross cost at a given market price rather than providing standard emissions factors for specific products such as steel or aluminium.
The final obligation must reflect the applicable emissions methodology and adjustments, including benchmark calculation outcomes and changes in chargeable emissions quantities. Even if market prices remain unchanged, alterations in benchmark calculations or chargeable emissions can change certificate requirements.
Country-level default values published under CBAM implementing rules were corrected in July 2026. For many goods other than electricity, a markup applies at 10% in 2026, rising to 20% in 2027 and 30% from 2028, while fertilisers have a different markup of 1%.
These markups must be separated from other components such as certificate prices, the CBAM factor used in free-allocation adjustments and customs duties. Electricity is subject to separate rules governing default values and actual emissions, and importers may need verified evidence when using actual emissions instead of default values.
Contract terms, import timing and reconciliation for compliance
CBAM exposure starts with classifying imported goods to determine whether the mechanism applies. The production installation and verified emissions calculation then establish whether actual emissions can be used instead of published default values. Customs release timing determines the relevant import period.
The declarant remains responsible for purchasing and surrendering required certificates and substantiating any eligible deduction for a carbon price paid abroad. Trading intermediaries and freight forwarders cannot substitute missing production records or factory verification evidence simply by changing commercial invoices; responsibility for accurate emissions information must be addressed separately within commercial arrangements.
Contracts can specify Combined Nomenclature (CN) classification, production site details, reporting year, verifier identity, deadlines for supplying and correcting emissions evidence, and treatment of revised carbon prices. Pricing clauses may allocate financial liability to an EU buyer while requiring suppliers to provide compliant documentation and compensate for deficiencies in required evidence.
Banks evaluating credit facilities can test potential certificate cash outflows using scenarios that combine higher carbon prices with higher emissions levels. Such assessments can provide more detailed views of potential liabilities than reliance on suppliers’ stated environmental credentials alone.
Differences between commercial charges and legal liabilities
Manufacturing, inventory holding periods and sales periods do not necessarily align with export timing into the EU. A producer may manufacture goods during one period, store them and export them during another period that determines reporting under CBAM rules.
The importer must establish the correct reporting period and retain supporting documentation required by applicable rules. For goods imported in 2026, the relevant CBAM certificate price follows the applicable quarterly pricing arrangement tied to when goods entered the EU.
A commercial agreement based only on a floating monthly carbon surcharge may not reflect statutory obligations under CBAM requirements. Buyers and suppliers can instead agree to reconcile commercial charges after official certificate prices and verified emissions results become available.
The reconciliation process needs to reflect how commercial calculations relate to final compliance requirements, particularly when initial emissions estimates or applicable prices differ from values used in final declarations.
Traceable liability calculations for auditors and lenders
Auditors and bank credit teams can assess CBAM exposure by requesting documented reconciliation between commercial estimates and formal certificate surrender figures. The calculation should identify tonnes of goods imported or megawatt-hours of electricity along with production route information, embedded emissions figures, benchmark adjustments, qualifying carbon-price deductions and resulting certificate requirements.
Each component can affect final obligations independently, so an unchanged carbon-market price does not guarantee unchanged CBAM liability if underlying emissions data or applicable adjustments change. Suppliers able to provide complete calculations and supporting documentation early may reduce dispute risk at year-end compared with approaches relying on national average values or unverified sustainability reports.
For manufacturers located in Western Balkans markets, credible emissions records can support negotiations with EU purchasers seeking discounts linked to uncertainty around carbon costs under CBAM compliance requirements. Across these arrangements, distinctions between imported product volumes, embedded tonnes of CO₂e and certificates ultimately required remain central to reconciling commercial pricing with formal CBAM obligations.