Producers of CBAM-covered goods see their free allocation shrink on a fixed annual CBAM-factor schedule, falling to 0% from 2038, as CBAM replaces free allocation as the carbon-leakage instrument for those goods.
Operators of installations producing goods covered by the Carbon Border Adjustment Mechanism must comply, and this is not law yet.
Why it matters
This is a Commission proposal: it is not law yet, and it can change before it is.
- It is Art. 1(15)(b)(i), replacing Art. 10a(1a), second subparagraph of Directive 2003/87/EC, in the EU ETS revision. as of 2026-08-14
- The act gives its timing as: 2026-2038, applies from 30 September 2027. as of 2026-08-14
- It names no industry: it applies across the economy rather than to one of them. as of 2026-08-14
- Compliance is checked by none, annual. as of 2026-08-14
- European cement makers are losing the free carbon allowances they used to get, worth €1.36 per tonne at today's carbon price. as of 2026
The rule
installation produces goods listed in Annex I to Regulation (EU) 2023/956 (CBAM)
Producers of CBAM-covered goods see their free allocation shrink on a fixed annual CBAM-factor schedule, falling to 0% from 2038, as CBAM replaces free allocation as the carbon-leakage instrument for those goods.
Who is affected
Burden drivers
Source text
The CBAM factor shall be equal to 100 % for the period between the entry into force of that Regulation and the end of 2025 and, subject to the application of provisions referred to in Article 36(2), point (b), of that Regulation, shall be equal to 97,5 % in 2026, 95 % in 2027, 91.5 % in 2028, 81 % in 2029, 59% in 2030, 48% in 2031, 37,5% in 2032 and 27% in 2033, 15% from 2034 to 2037.
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