EU carbon allowances continued to trade at elevated auction prices in early November, reinforcing expectations that the fourth-quarter reference for Carbon Border Adjustment Mechanism certificates will exceed the official figure published for the preceding quarter.
Early November prices
The EU ETS auction on 5 November cleared at approximately €90.01/tCO₂, compared with €90.16/tCO₂ in the previous reported auction on 3 November. An independently compiled fourth-quarter volume-weighted average stood at about €86.53/tCO₂ after the latest sale, up from €86.35/tCO₂ in the preceding calculation.
That provisional average is approximately 5.1% above the Commission’s official Q3 2026 CBAM certificate reference of €82.32/tCO₂e. It is not, however, the binding fourth-quarter certificate price.
How the reference is set
Under the 2026 mechanism, the European Commission calculates certificate references on a quarterly basis using relevant EU ETS auction results. The official Q4 figure is scheduled for publication on 4 January 2027, while a weekly pricing arrangement is scheduled to apply from 2027.
Calculating importer exposure
The price difference matters for importers budgeting the cost of carbon-intensive inputs, but a carbon allowance price is not the same as a universal per-tonne surcharge on imported goods. The liability depends on the product’s chargeable embedded emissions and the applicable regulatory adjustments.
Steel made in different production routes can have materially different emissions intensities. Aluminium, cement, fertilisers and hydrogen require their own process-specific calculations. Electricity is subject to separate treatment, including conditions for using actual generation emissions in place of the relevant default.
The phased interaction with EU ETS free allocation can reduce the number of certificates otherwise due. Carbon prices effectively paid in a third country can also be considered where the relevant conditions and supporting evidence are met. None of those adjustments should be assumed without supporting data.
Managing commercial risk
For Serbia, Montenegro, Bosnia and Herzegovina and Türkiye, higher carbon-price assumptions may improve the relative position of producers with credible lower-emission output, but only when EU buyers can rely on appropriately prepared and verified installation information.
For importers, the commercial response may include indexed supply contracts, carbon-cost sharing and stronger verification provisions. Traders with thin margins may need additional working capital to manage the timing of certificate acquisition and annual settlement.
Banks financing steel or electricity imports should use more than one price scenario, check whether clients rely on actual or default emissions and account for possible revisions to volumes, supplier mix and commercial pass-through.
Short-term allowance prices are also sensitive to gas and coal demand, weather, industrial output and market expectations. The difference between a provisional calculation and an eventual legally published reference should remain visible in every model.
Carbon prices are elevated, but the definitive financial outcome for an import still depends on the applicable quarter, actual trade records, verified emissions and the EU rules in force at settlement.