The Obligation to Purchase CBAM Certificates

The Carbon Border Adjustment Mechanism (CBAM) aims to establish a so-called level playing field between the carbon price incurred within the European Union and any carbon price that may apply to production abroad. To achieve this, CBAM introduces an emissions trading system and requires importers to purchase CBAM certificates. This obligation will commence with the start of the mechanism's regular phase on January 1, 2026. With just a year to go, several critical aspects remain unclear. The European Commission has now clarified some points in its latest FAQ.

Purchasing Certificates

In principle, every ton of CO2 emissions embodied in imported goods requires the purchase of one CBAM certificate. Only importers holding the status of authorized CBAM declarants are permitted to buy these certificates. The purchase is made through the member state where the importer is established, but the process will be conducted via a unified EU-wide platform. Further details will be specified in an implementing act, expected to be published in Q2 2025.

Quarterly Minimum Quota

Although CBAM certificates can be purchased at any time, affected companies must ensure that by the end of each quarter, they cover 80% of the emissions embodied in their imported goods up to that point with certificates. This minimum threshold will be calculated based on the standard values applicable at the time.

Submitting Certificates

The submission of certificates will take place in the CBAM Registry. Companies must first submit their CBAM Declaration, specifying how many certificates they believe are due. They must then surrender the corresponding number of certificates. Companies can select individual certificates from their account, allowing them to decide which certificates to submit.

Reduction for a Foreign Carbon Price

Affected companies may also deduct a carbon price paid abroad, provided it has been effectively incurred. This ensures alignment of carbon pricing only up to the level playing field without imposing additional burdens on imports. Detailed regulations on this will be outlined in an implementing act, scheduled for publication in Q4 of next year.

Harmonization with Free Allocation Under the EU ETS

The number of CBAM certificates required must also be aligned with the free allocation of certificates under the EU Emissions Trading System (EU ETS). Benchmarks used under the EU ETS will serve as a basis, though they are not linked to the Combined Nomenclature. Adjustments or combinations will therefore need to be made by the European Commission. Another implementing act addressing this is expected in Q4 2025.

Support for Certificate Management

If you need assistance in optimizing your certificate management, feel free to contact us at helge@kolum.earth. We are happy to help you save time and costs. Best regards, Helge Wieggrefe