The European Commission has confirmed that final Carbon Border Adjustment Mechanism (CBAM) benchmarks will only become available after the revision of EU Emissions Trading System (ETS) benchmarks in 2026. The update was shared at a CBAM event held by the Japan Business Council in Europe and reported by Germany-based consulting company carboneer CEO Hendrik Schuldt.
A default CBAM benchmark will reflect the “typical production process” for each category of CBAM goods. Verified supplier data may be used to demonstrate alternative production processes, which could lead to different applicable benchmarks representing the free allowances a producer would receive if those processes were carried out in the EU.
Updated embedded emissions rules, default values and price list
The Commission said that CBAM emission calculation rules will see slight modifications compared with the transitional phase.
Default values will be published in the fourth quarter of 2025 as an annex to the implementing regulation on emission calculation. These default values will be established for all trading partners. No details were provided regarding potential mark-ups, other than the requirement that they be sufficiently high to avoid benefiting emission-intensive producers.
Meanwhile, in 2026, the Commission will collect data on actual carbon prices paid in exporting countries, including discounts and rebates. Default carbon prices will be published in 2027 through the CBAM registry. Documentation requirements for proving actual carbon prices will be drafted with third-country authorities.
Verification rules to closely mirror EU ETS
According to carboneer’s analysis of the leaked draft rules, CBAM verification procedures will replicate ETS practices to establish parity between EU and non-EU producers:
- Non-EU producers are required to monitor and report emissions in accordance with standardized CBAM methodologies.
- Verifiers perform risk assessments, conduct on-site or virtual plant visits, and carry out detailed reviews of reported data.
- If verifiers identify material misstatements or non-conformities, the verification fails and the data cannot be used in the importer’s CBAM declaration. Non-material issues must be addressed and corrected before the final verification report is issued.
- Verification is required for each reporting period, typically once per year. Importers may rely on positive verification reports or those with minor issues that have been rectified when preparing their annual CBAM declarations.
Future scope expansion delayed to 2027
The Commission stated explicitly that no CBAM scope extension will take effect before 2027. Pending items include possible inclusion of additional industrial goods, addressing the steel scrap loophole, also postponed until 2027, and review of indirect emissions pricing for iron and steel and for aluminum, which will be included in the review report at the end of the year. While no immediate legislative proposal is expected, indirect emissions are considered increasingly likely to be added.
The Commission stated that there will be no general support scheme for exporters. Targeted support will instead be based on carbon leakage risk and on the climate-related efforts of companies. Further details are expected after the ETS review next year. The mechanism may resemble the EU Innovation Fund model, providing project-specific funding. Additional clarification is expected in the coming weeks.
