European companies importing steel, aluminium, fertilisers and other goods covered by the Carbon Border Adjustment Mechanism (CBAM) face two separate uncertainties when forecasting future compliance costs. One relates to fluctuations in EU carbon certificate prices. The other concerns potential changes to the phase-out of free emissions allowances for European industry under the EU Emissions Trading System (EU ETS).
The European Commission published a CBAM certificate price of €82.32 per tonne of CO₂ equivalent (tCO₂e) for the third quarter of 2026, up from €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 affect the adjustment used to calculate importers’ carbon liabilities if adopted.
CBAM certificate pricing for 2026 and planned weekly calculations
The Commission published the third-quarter 2026 certificate price on October 5, 2026. Under the applicable framework, the relevant quarterly price corresponds to the quarter in which goods entered the EU. This links the timing of import entry to the certificate price used in calculations.
A change is scheduled for 2027, when certificate prices will be calculated weekly rather than quarterly. The shift is expected to affect how importers manage timing between customs release, certificate purchases and financial settlement. 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 interval between importing goods and purchasing certificates creates working-capital and accounting considerations for businesses. Commercial invoices may be paid months before corresponding carbon certificates are acquired, requiring estimates of liabilities before final settlement.
EU ETS revision proposal could alter free-allocation adjustment factors
Under legislation currently in force, the CBAM factor used in the free-allocation adjustment is 97.5% for 2026, falling to 95% in 2027, 90% in 2028 and 51.5% in 2030. The existing phase-out schedule provides for complete withdrawal of free allocation in 2034.
The European Commission’s broader EU ETS revision proposal, COM(2026)616, published in July 2026, would change this trajectory if implemented. Under the proposal, CBAM factors would be 91.5% in 2028, 81% in 2029 and 59% in 2030. The complete removal of free allocation would be 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 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.
Emissions methodology and default-value markups shape certificate requirements
The number of certificates required depends on product-specific benchmark calculations, the relevant production route and eligible deductions. Applying an annual phase-in percentage directly to total embedded emissions without following the applicable methodology can lead to an incorrect liability estimate. Emissions calculations determine how chargeable emissions translate into certificate requirements.
A pricing-and-emissions relationship can be illustrated using hypothetical shipments at the third-quarter 2026 price of €82.32/tCO₂e. If net chargeable emissions are calculated as 1.0 tonne per tonne of imported goods, gross certificate exposure would be €82.32 per tonne of goods. If net chargeable emissions were instead 0.4 tCO₂e per tonne of goods, exposure would be €32.93 per tonne.
These examples do not establish standard emissions factors for steel or aluminium; they show how calculated chargeable emissions drive gross costs at a given market price. The final obligation must reflect the applicable emissions methodology and adjustments, meaning changes to benchmark calculations or chargeable quantities can affect certificate requirements even if carbon prices remain unchanged.
Default-value markups also vary by product category and were corrected at country level under CBAM implementing rules in July 2026. For many goods other than electricity, a 10% markup applies in 2026, rising to 20% in 2027 and 30% from 2028. Fertilisers have a different markup of 1%.
These markups must be separated from the certificate price, the CBAM factor used in free-allocation adjustments and customs duties. Electricity is subject to separate rules governing default values and actual emissions. For importers, differences between default values and verified actual emissions can affect compliance calculations, making production installation identification and verification evidence part of emissions assessment.
Contract terms on data delivery, timing and reconciliation with legal obligations
CBAM exposure begins with classifying imported goods to determine whether the mechanism applies. The production installation and verified emissions calculation then determine whether actual emissions can replace published default values. Customs release timing sets the relevant import period while the declarant remains responsible for purchasing and surrendering required certificates.
The declarant also substantiates any eligible deduction for a carbon price paid abroad. Trading intermediaries and freight forwarders cannot replace missing production records or factory verification evidence by changing commercial invoices alone. Responsibility for accurate emissions information and completion of formal compliance steps needs to be addressed separately within commercial arrangements.
Contracts can specify Combined Nomenclature (CN) classification, production site, reporting year and verifier details, along with 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 provide a more detailed view than relying only on supplier-stated environmental credentials.
Import periods can diverge from commercial pricing; documentation supports audits
Manufacturing, inventory holding and sales periods do not necessarily align with export timing into the EU. A producer may manufacture goods in one period, store them and export them later into another period covered by CBAM reporting requirements. 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 entry into the EU. A commercial agreement based only on a floating monthly carbon surcharge may therefore not reflect statutory obligations under CBAM rules. Buyers and suppliers can reconcile commercial charges after official certificate prices and verified emissions results become available.
The reconciliation process needs to account for how commercial calculations relate to final compliance requirements, particularly when initial emissions estimates or applicable prices differ from values used in final declarations.
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, production route, embedded emissions, benchmark adjustment, qualifying carbon-price deduction and resulting certificate requirement.
Each element can affect final obligations independently; therefore an unchanged carbon-market price does not guarantee unchanged CBAM liability when underlying emissions data or applicable adjustments change. Suppliers able to provide complete calculations and supporting documentation early may reduce year-end dispute risk compared with approaches relying on national average values or unverified sustainability reports.
The distinction between imported product volumes, embedded tonnes of CO₂e and certificates ultimately required remains central when reconciling commercial pricing with CBAM compliance requirements for manufacturers seeking discounts linked to uncertainty around carbon costs across Western Balkans markets.