The European Commission expects to release the final benchmarks for its Carbon Border Adjustment Mechanism by early 2026, as pressure builds on Brussels to provide clearer implementation guidance.

In a letter addressed to the European Association of Non-Integrated Metal Importers and Distributors, seen by Platts, the Commission said it is working to finalize the methodology for calculating embedded emissions and default values and conditions for deducting third-country carbon prices.

The Commission said the CBAM benchmarks will be based on the respective EU Emissions Trading System benchmarks to adequately mirror the bloc's carbon market.

"Currently, these ETS benchmarks are being updated for the period 2026-2030, and we are expecting that they will only be adopted in early 2026," said the letter signed by Gerassimos Thomas, director-general for taxation and customs union at the European Commission. "This means that a final list of CBAM benchmarks may only be available at that moment."

The benchmark value is a reference value used to calculate the embedded emissions of imported goods and determine the cost of CBAM certificates. It is derived from the average greenhouse gas emissions of the 10% most efficient installations in the EU for that product.

Embedded emissions

"The Commission is well aware of the importance of preparing benchmarks for free allocation, as they play a crucial role in determining the CBAM liability," a Commission official told Platts.

This development comes as businesses have been eagerly waiting for Brussels to provide more details on CBAM, which would help importers estimate the costs of this carbon pricing mechanism and assess its impact on global supply chains.

"We are currently working on an implementing act defining the rules to calculate embedded free allocation and constructing the benchmarks, alongside other rules relating to the system for monitoring, reporting and verification in the definitive period, embedded emissions and the carbon price paid in the countries of origin," the official said.

CBAM is in a transitional phase, requiring importers to report emissions without financial penalties. The mechanism enters its definitive phase on Jan. 1, 2026, with companies liable for their emissions. This is expected to have significant implications for carbon-intensive industries.

CBAM currently covers only sectors including cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen.

Brussels recently launched a call for evidence to gather stakeholder input as it refines technical aspects of emissions intensity calculations, free allocation adjustments and carbon price deductions in preparation for the EU's CBAM entering its definitive phase Jan. 1, 2026. The consultation was launched Aug. 28 and ran until Sept. 25.

The EU's CBAM works alongside the bloc's ETS by imposing carbon pricing on imports, designed to prevent carbon leakage as Brussels phases out free emissions allowances for domestic producers. Under the mechanism, importers must purchase CBAM certificates equivalent to the carbon content of goods from six covered sectors: aluminum, cement, electricity, fertilizers, iron and steel and hydrogen.

Carbon permits in Europe are currently around 10 times more expensive than compliance prices in China, the world's industrial powerhouse.

Platts, part of S&P Global Commodity Insights, assessed EU Allowances for December 2025 at Eur75.70/mtCO2e ($88.86/mtCO2e) on Sept. 30. This compares with China's compliance emission allowance, or CEA, which was valued at Yuan 59.68/mtCO2e ($8.38/mtCO2e) on Sept. 19, according to the Shanghai Environment and Energy Exchange.

The aim of CBAM is to level the playing field for EU companies, as most exporting countries either do not have a carbon price as high as that of the EU ETS or lack a price on emissions altogether.