The EU has launched consultations on three key initiatives within the CBAM mechanism

The European Union has launched consultations on three key initiatives under the Cross-Border Carbon Adjustment Mechanism (CBAM). These involve the preparation of implementing acts that will define the rules for applying CBAM in its final form from January 1, 2026.

The consultations cover three areas: the methodology for calculating embedded carbon emissions in goods, the rules for taking into account free allowances in the EU ETS, and the procedure for reducing CBAM certificates if a carbon price has already been paid for the product in the country of origin.

The first area concerns clarifying the methodology for determining direct and indirect emissions, the use of actual data, and the conditions for applying baseline values. The European Commission seeks to simplify and unify procedures to reduce the administrative burden on companies and ensure the environmental integrity of the mechanism.

The second area relates to the gradual phasing out of free EU ETS allowances in 2026-2034. The new rules will establish how this compensation will be taken into account when calculating CBAM obligations to ensure a level playing field for producers in the EU and third countries.

The third initiative provides for the determination of the procedure for offsetting the carbon price paid in a third country. This will allow importers in the EU to reduce the number of CBAM certificates, subject to confirmation of payments and compliance with certification.

According to the European Commission, these acts have economic and environmental effects. They will provide legal certainty for businesses, reduce the risks of carbon leakage, promote global decarbonisation and support the competitiveness of the EU internal market. The consultation will last four weeks, after which the Commission will take the proposals into account in the final documents, which are scheduled for adoption in the fourth quarter of 2025.

As a reminder, on July 2, 2025, the European Commission presented amendments to the EU climate law, proposing that the bloc reduce net greenhouse gas emissions by 90% by 2040 compared to 1990 levels.