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Verification under CBAM – Key learnings and guidance for effective preparation (Part 2)

21. April 2026/by Simon Goess

Using actual CBAM data can substantially reduce CBAM‑related costs for importers. However, essential data points—such as direct specific embedded emissions or specific embedded free allocation—must be available in verified form to be eligible for use in a CBAM declaration.

In this series (find part 1 here) we cover the key processes and requirements for verification under CBAM along with our experiences in preparing CBAM declarants, suppliers and non-EU producers. This second part provides guidance on how operators of installation can prepare for verification under CBAM.

Preparation for verification: Requirements

During the transitional period of the CBAM implementation (2023-2025), operators of installations in third countries were able to provide CBAM data to their EU-based customers through the official CBAM communication template for installations (the EU Commission is currently working on an updated version), the O3CI-portal of the CBAM registry (verification reports will only be issued here) or other means such as the carboneer developed EFDA template. While all such documentation of calculated CBAM data is considered an emissions report under the CBAM framework, it only represents the final output of a complete CBAM data monitoring, collection and calculation processe.

From the start of the definitive period of CBAM on 1 January 2026, any CBAM data for the calendar year 2026 intended for verification must be substantiated. Operators thus require a structured and compliant approach to data monitoring and calculation (see Figure 1), including:

Developing a monitoring plan and implementing the described methods and procedures in accordance with the monitoring and calculation rules in Implementing Regulation 2025/2547,
Preparing an emissions report incorporating relevant data from precursor suppliers and the operator’s own production processes, resulting in the final calculated CBAM data,
Compiling documentation and evidence supporting reported information from internal and/or external sources.

Figure 1: Components of a CBAM-compliant system for data collection and calculation for verified CBAM data (source: carboneer)

The missing foundation: the monitoring plan

Without a monitoring plan that describes and documents the systems and methods for generating CBAM relevant data at the installation level, verification cannot take place. Such monitoring system must conform to the new calculation rules under Implementing Regulations 2025/2547, 2025/2620 (free allocation adjustment) and 2025/2621 (default emissions values). Specifically, the monitoring plan must be prepared in English and include among other elements:

Description and diagram of the installation defining production processes, products and the system boundary,
List and description of emissions sources and activity data, calculation rules and precursors information,
Description of data management, control procedures and quality systems that ensure reliable and accurate CBAM data.

According to current information from the EU Commission, no official monitoring plan template will be provided. Instead, operators of installations in third countries must therefore design and implement installation-specific monitoring plans and systems themselves. At carboneer, we have developed a monitoring plan template aligned with the up-to-date CBAM calculation rules and requirements to support our work with producers of CBAM goods worldwide (see excerpts in Figure 2).

Figure 2: Excerpts of the carboneer CBAM monitoring plan template (source: carboneer)

CBAM preparedness: Insights from practical experience

Working on CBAM data calculation over the past years, we have repeatedly observed that many producers are insufficiently prepared for the regulatory and methodological complexity of CBAM‑specific rules. The increased use of the CBAM communication template or carboneer’s EFDA template has improved the availability of basic emissions and activity data. However, the plausibility and internal consistency of that data often remain weak or even dubious. Common issues include:

Fragmented data sets
Inconsistent or incompatible units
Unexplained changes over time and wrong monitoring periods
Missing or incomplete underlying monitoring systems

While forthcoming EU guidance documents and webinars may clarify certain aspects and expectations, they will not replace the need for producers to establish robust inhouse monitoring systems to become “verification ready”.

A fundamental challenge is that many producers still lack formal CBAM monitoring plans and documented data‑collection procedures, which are essential prerequisites for any meaningful third‑party verification. In absence of clear descriptions of system boundaries, allocation rules, and data sources, verifiers cannot reliably assess whether reported values are complete and accurate. Such shortcomings might result in negative verification statement or a prolonged verification process with potential implications for availability of verified data for the CBAM declaration deadline on 30 September 2027.

Beyond structural issues, we frequently notice that producers either do not calculate all required CBAM data points under the new CBAM calculation rules or are lulled into complacency by relying on outsourcing crucial CBAM-related tasks. Critical data points such as specific embedded free allocations (SEFA) are often missing, misinterpreted, or calculated using inconsistent assumptions. Likewise, many operators lack actual CBAM‑compliant data from their precursor suppliers and therefore depend on default factors or rough estimates. These gaps can result in financial risk and reputational exposure, as EU importers rely on this information in their commercial decision-making already now.

Turning CBAM data into competitive advantage: Step-by-step guidance

During support for importers and producers, our projects on CBAM verification preparation typically follow a structured sequence of phases (see Figure 3):

CBAM gap assessment: Identification of methodological weaknesses, data gaps, and potential risk analysis
Development of monitoring plan: Establishing a systematic and installation-specific approach to data collection
CBAM data calculation: Implementation of the monitoring plan, collection of primary data, and calculation of embedded emissions and embedded free allocations
Workshops and trainings for staff: Building long-term CBAM capacity within the organisation to ensure inhouse data collection, calculation and verification readiness

Figure 3: Step-by-step project structure for CBAM verification preparation by carboneer (source: carboneer)

Through early identification of data gaps, streamlined data collection, and implementation of scalable processes, suppliers and importers can thus ensure that their processes are aligned with CBAM methodology and verification standards.

Preparing for CBAM verification during 2026 will be crucial for importers and producers — particularly where commercial viability of products may be at risks if importers are forced to revert to high default values.

Verification under CBAM – Key learnings and guidance for effective preparation (Part 1)

29. March 2026/by Simon Goess

In this series we cover the key processes and requirements for verification under CBAM along with our experiences in preparing CBAM declarants, suppliers and non-EU producers. This first part focuses on the commercial importance of verified data as well as the accreditation and verification processes.

Commercial value: Verified CBAM data vs. Defaults

From 2026 onward, all CBAM-covered imports are subject to payment obligations. Costs however remain uncertain, not only because CBAM certificate prices for remaining quarters in 2026 will only be finally known ex-post, but because many importers lack clarity on availability and plausibility of actual CBAM emissions data from suppliers.

The key risk: If suppliers cannot provide verified CBAM emissions data by 30 September 2027, importers must report using default values, which are typically significantly higher. This may dramatically increase reported emissions and lead to major cost increases — potentially adding hundreds of euros per tonne — making imports economically unviable (see our article here). Figure 1 provides an overview of CBAM costs for imports of tubes and pipes from different countries in line with the default emissions values.

Figure 1: CBAM cost per tonne of tubes and pipes CN 7306 6199, based on carboneer model CBAMCC. Modelling assumptions: Import during Q1 2026, CBAM certificate price 75 €, default values, no CO2 prices paid in supply chain (source: carboneer).

Verified CBAM data therefore offers major commercial value, particularly for imports from countries facing punitive default values. Access to verified data can potentially reduce CBAM costs down to zero, safeguarding the competitiveness of both non‑EU suppliers and importers.

A key challenge arises from the split responsibilities: Emissions occur and data is generated at the supplier level, while the financial obligation to purchase CBAM certificates lies with the importer. This raises important questions about cost allocation — for example, whether cost increases should be borne by the supplier or the declarant, especially where suppliers already provide non‑verified actual data that allow for cost estimates. Possible approaches include:

Supplier‑led hedging strategies allowing to offer products including CBAM costs
Supplier contracts with defined markups or rebates depending on availability and final verified data

However, the availability of actual CBAM data in verified form is constrained by strict and complex calculation rules and verification requirements as laid out in the CBAM regulation and relevant implementing and delegated acts. During our work with importers and non-EU producers of CBAM goods we are confronted with recurring questions and misunderstandings regarding CBAM data calculations and verification. This series aims to clarify some of those topics and shed light on the relevant processes.

Potential bottleneck: Accreditation for CBAM verification

Verification bodies may only provide verification under CBAM if accredited by a National Accreditation Body (NAB) of an EU member state. As of today, no verification body has been officially accredited. NABs are expected to open CBAM accreditation schemes until May 2026 (the DAkkS as the German NAB already opened the application process) , with a tentative timeline for the first accreditations issued by late 2026. Accredited verification bodies will gain access to the CBAM Registry from September 2026 Accreditation as detailed in Delegated Regulation (EU) 2025/2551 is thus often a multi-month process designed to ensure verifiers’ ability and expertise of the specific rules on CBAM data monitoring and calculation (e.g. embedded emissions and embedded free allocations).

Several internationally operating verification bodies are already accredited under the European Emission Trading System (EU ETS) and will likely be the first official verifiers accredited for the CBAM scope as well. Verification bodies that seek accreditation under CBAM do not have to be EU-based but can also be located in third countries. To date, only 6 out of 21 NABs have confirmed that they will open their accreditation processes to applicants based in third countries (compare overview in Table 1).

Table 1: List of National Accreditation Bodies for CBAM verifiers in the EU

Country	National Accreditation Body (incl. link)	Accreditation of applicants in third countries
Austria	Akkreditierung Austria (AA)
Belgium	Belgian Accreditation Council (BELAC)
Croatia	Croatian Accreditation Agency (HAA)
Czech Republic	Czech Accreditation Institute (CAI)
Denmark	Danish Accreditation Fund (DANAK)
Finland	Finnish Accreditation Service (FINAS)
France	Comité français d’accréditation (COFRAC)	Yes
Germany	Deutsche Akkreditierungsstelle (DAkkS)
Greece	Hellenic Accreditation System (ESYD)	Yes
Hungary	National Accreditation Authority (NAH)
Italy	Ente Italiano di Accreditamento (Accredia)	Yes
Latvia	Latvian National Accreditation Bureau (LATAK)
Lithuania	Lithuanian Accreditation Bureau (LA)
Netherlands	Raad voor Accreditatie (RvA)	Yes
Norway	Norsk akkreditering (NA)
Poland	Polskie Centrum Akredytacji (PCA)	Yes
Portugal	Instituto Português de Acreditação (IPAC)
Romania	Romanian Accreditation Association (RENAR)
Slovenia	Slovenska Akreditacija (SA)
Spain	Entidad Nacional de Acreditación (ENAC)
Sweden	Swedish Board for Accreditation and Conformity Assessment (Swedac )	Yes

In our work, we frequently encounter “certification” or “verification” statements on CBAM data by third parties which at closer scrutiny do not hold up to the CBAM data calculation rules or conform to the CBAM verification standards. Four main bottlenecks may impede importers from using actual verified data in their CBAM declaration due 30 September 2027:

Limited availability of accredited verification bodies and auditors
Short verification period (Jan-Sep 2027)
Verification requirements throughout the value chain
Moderate level of producer preparedness

Timely preparation for verification by non-EU producers of CBAM goods already during 2026 is crucial to mitigate these risks, increase confidence in CBAM data and thus reduce prospective costs for CBAM declarants.

A complex and lengthy process: How CBAM verification works

CBAM data such as embedded emissions or embedded free allocation must be verified for each monitoring period, i.e. every calendar year, before an importer may use it in their annual CBAM declaration (see Figure 2). Verification must be performed by accredited CBAM verifiers in line with the principles in Implementing Regulation (EU) 2025/2546, using a risk‑based approach similar to the EU ETS.

Figure 2: The annual verification process (source: carboneer)

A key feature of the process are mandatory site visits as part of the verification activities: For the first year of the definitive phase in 2026, a physical on‑site visit to each installation producing CBAM goods is mandatory. From 2027 onwards, verifiers may, under defined low‑risk conditions and where no significant changes have occurred, replace a physical visit with a virtual visit or waive it entirely, but a physical site visit must still take place at least once every two years.

In practice, the verification process might take three months for well‑prepared operators but can take considerably longer in case the operator’s preparation is insufficient. The process follows several structured stages (see Figure 3): initial risk analysis and kick‑off, detailed verification planning and document request, audit and site visit with data testing and interviews, followed by processing, clarification of findings and adjustments, internal quality assurance on the verifier side, and finally issuance of the verification statement and standardised verification report in the CBAM Registry.

Figure 3: Indicative timeline and details of a CBAM verification process (source: carboneer)

As accredited verifiers are expected to be officially announced only in late 2026, non-EU producers currently should use the time to prepare for the verification process — or even conduct pre-verification activities — during 2026.

In the second part of this series, we will provide practical guidance on how producers can prepare efficiently for CBAM verification.

Reducing CBAM costs through verification

11. February 2026/by Simon Goess

Importers of CBAM goods are currently struggling with great uncertainty. Do they have to use the high default values for grey emissions when submitting their CBAM declaration for import in 2026 or are their suppliers able to provide actual verified CBAM data? The cost implication of the two options can differ greatly.

High uncertainties for importers

While CBAM goods could be imported before 1 January 2026 without an obligation to pay, all imports have been subject to a payment obligation since the start of 2026 (see our article regarding the start of the definitive CBAM phase). However, many importers are not yet clear how high the payment for the grey emissions will be. On the one hand, the reason for the unclarity is that CBAM certificate prices for imports during 2026 will only be determined at the end of each quarter.

However, the second and often more critical reason is that if suppliers do not know if their suppliers can provide verified real data for embodied emissions and CBAM benchmarks (specific free allocation) by 30.09.2027 (2026 CBAM declaration deadline for imports). If they cannot, the importer must use default values for reporting. The default values for grey emissions are very high for some countries and products and may double or triple product prices.

The value of verified actual data

Such an increase in costs is not feasible for many companies, which in turn could bring the import of these goods to a standstill or result in high margin reductions for importers. As an example, Figure 1 shows the difference in CBAM costs for importing steel pipes from India, once with verified data and once with the assumption of default values.

Figure 1: Example of CBAM costs using verified data vs. default values (Source: carboneer)

In this case, the cost difference between verified real values and standard values would amount to almost 240,000 EUR. An importer of these products would therefore have to pay CBAM costs of EUR 323 per tonne of imported product using the standard values. With a product price without CBAM of EUR 800-1200 per tonne, the additional CBAM costs are therefore very significant.

For the strategic and economic evaluation of suppliers, goods and products, affected companies should evaluate and compare different suppliers and their products in scenario analyses (see Figure 2 with an excerpt from carboneer’s CBAMCC model).

Figure 2: Scenario analysis for the strategic evaluation of CBAM (Source: CBAMCC carboneer)

Without appropriate assessment and preparation, the CBAM declaration and the obligation to surrender CBAM certificates in 2027 could be a nasty surprise for importers.

Preparation for verification

However, in order to be able to use actual data from suppliers, this data must be available in verified form. Only independent verifiers, accredited by the national accreditation bodies of EU member states, are allowed to determine the authenticity of data under CBAM. Furthermore, suppliers must prepare extensively for verification, as the inspection bodies themselves are not allowed to provide support for the collection or calculation of CBAM data.

It is expected that the first accredited verifiers will not be known until earliest mid-2026. The final verification will also not be completed before the beginning of 2027, as the production data from 2026 will only be available by the start of the new year. Figure 3 shows the data flow from producer to importer.

Figure 3: The annual verification process (Source: carboneer)

In addition to a mandatory inspection of the supplier’s facility by the auditor, producers of CBAM goods must also submit a monitoring plan that describes in detail the methodologies for measuring, calculating and collecting a large number of relevant data points. Without such a plan, no verification of the data can take place.

As of 1 January 2026, the rules for CBAM emission calculation have also changed and other data points, such as the CBAM benchmarks, are necessary to successfully pass a verification. In our experience, only a few producers and suppliers can fully comply with the current CBAM rules. The high number of production sites worldwide as well as potential capacity limitations at the verifiers makes verification without sufficient preparation in many cases unlikely. Without verified actual data, CBAM costs for importers could increase dramatically.

In our experience, structured support can prepare suppliers for verification within a few weeks. Especially if the potential cost savings for the importer would mean tens to hundreds of thousands of euros, direct supplier support is currently one of the most promising ways to limit CBAM costs and gain competitive advantage.

We will dive into further ways to reduce or secure CBAM costs, especially with regard to the management of CBAM certificates, in upcoming articles and webinars.

CBAM enters the definitive period: key regulatory updates and scope extension

31. December 2025/by Simon Goess

Following two years of a transitional reporting-only phase that began in October 2023, the EU Carbon Border Adjustment Mechanisms (CBAM) will move into its definitive period on 1 January 2026, when financial obligations will start to apply. In December 2025, the European Commission released a comprehensive package of implementing and delegated acts to operationalise this shift, alongside a legislative proposal to significantly expand CBAM’s scope and strengthen its anti-circumvention framework. Together, these developments confirm CBAM’s as a central pillar of the EU’s climate and industrial policy.

Stay informed and join us during the carboneer webinar “Digesting the latest CBAM updates – Implications for stakeholders” on 8 January 2026.

Current status and the start of the definitive period in 2026

During the transitional phase, importers of covered goods had to report embedded emissions on a quarterly basis without purchasing CBAM certificates. This phase ends on 31 December 2025. From 1 January 2026, CBAM enters its definitive period, triggering the obligation for authorised CBAM declarants (imports above the mass threshold of currently 50 tonnes of CBAM goods per year) to surrender CBAM certificates corresponding to the embedded emissions of imported goods, adjusted for free allocation under the EU Emissions Trading System (EU ETS). The first surrender deadline will be the 30 September 2027 for imports during the year 2026.

The financial application of CBAM will be phased in gradually, mirroring the progressive phase-out of free allocation under the EU ETS through 2034. This alignment is intended to ensure a level playing field between EU producers and third-country suppliers, while maintaining the environmental integrity of the EU’s climate framework.

Publication of final legislation for the definitive CBAM period

On 17 December 2025 – just two weeks before the start of the definitive period – the European Commission published a package of adopted draft implementing and delegated acts designed to make CBAM fully operational. These documents provide long-awaited legal and technical clarity for importers, producers, verifiers, and national authorities for the start of the definitive CBAM period. While first provided on a provisional basis, most of the documents are already officially adopted through publication in the Official Journal of the European Union (compare Table 1).

Table 1: Published legal acts for the CBAM definitive phase and proposals for further amendments of the CBAM

Legislation	Content	Status
IR	Calculation rules for embedded emissions	in force
IR	Calculation of the free allocation adjustment to the number of CBAM certificates to be surrendered	in force
IR	Information communicated by customs authorities	in force
IR	Establishment of default values	in force
IR	Calculation and publication of the price of CBAM certificates	in force
IR	Principles for verification of declared embedded emissions	in force
DA	Specifying the conditions for granting accreditation to verifiers	in force
Regulation	Extension of its scope to downstream goods and anti-circumvention measures	Proposal
Regulation	Establishing the Temporary Decarbonisation Fund	Proposal
IR	Amending and correcting: authorised CBAM declarant	Amendment
IR	Amending and correcting: CBAM registry	Amendment
IR: Implementing Regulation, DA: Delegated Act

In parallel, the Commission proposed an amendment to the CBAM regulation to extend CBAM to downstream products and to introduce additional anti-circumvention measures. Unlike the implementing framework, this proposal for scope extension must still go through the ordinary legislative procedure involving the European Council and the European Parliament.

Delegated and implementing acts: overview and main topics

The CBAM implementing framework consists of eight implementing acts and one delegated act, addressing most of the core operational elements of the mechanism.

The implementing act on emissions calculation methodology establishes harmonised rules for monitoring and calculating embedded emissions at installation level in non-EU countries. It aligns CBAM system boundaries with those of the EU ETS and allows a combination of actual and default values for different precursors.

The implementing act on free allocation adjustment defines how CBAM obligations are reduced to reflect the free allocation of allowances in the EU ETS. It introduces CBAM benchmarks per CN code under the scope of CBAM, with a differentiation between using actual verified and default emissions values (compare our analysis here). CBAM benchmarks per CBAM product can also differ based on the production route such as for natural gas-based direct-reduced iron (DRI), as well as electric arc furnace (EAF) produced steel. This aims to avoid zero-obligation outcomes that would undermine CBAM’s environmental objectives.

The implementing act on default values sets country- and CN-code-specific default emission values for the definitive period (compare our analysis here). For non-electricity goods, these include mark-ups to reflect potential underestimation of emissions. These mark-ups are phased in with highest values of +30% for most CBAM products from 2028 onwards. The default values will be reviewed regularly, with a first reassessment expected by December 2027.

The implementing act on CBAM certificate pricing specifies how CBAM certificate prices will be determined. From 2027 onwards, prices will mirror the weekly average EU ETS allowance price, while for 2026 imports, quarterly averages will apply. Prices will be published directly in the CBAM Registry.

Two acts address verification and accreditation (compare our analysis here). Verifiers must perform on-site inspections in the first year of reporting, i.e. 2026. There is limited flexibility for virtual visits thereafter, following a risk-based approach. Accreditation for verifiers is open to entities established both inside and outside the EU, provided they are accredited by EU accreditation bodies.

Additional implementing acts cover the authorised CBAM declarant status, the definitive CBAM Registry, and information exchange with customs authorities, collectively streamlining procedures, enhancing transparency, and strengthening enforcement.

The legal acts regarding the conditions for sales and repurchase of CBAM certificates and the rules regarding CO2-prices paid in the supply chain are still under development and expected in Q1 2026.

Low CBAM benchmarks and high default values: cost implications

A key practical implication of the new framework is the cost impact of relying on default values. CBAM benchmarks for free allocation adjustments are generally low, while default emission values – increased by the mark-ups – are relatively high. As a result, importers unable to provide verified actual emissions data may face significantly higher CBAM costs (compare example in Figure 1).

Figure 1: Estimated CBAM certificate costs for imports of 1200 tonnes of tubes and pipes from India using default values (blue) and actual values (green). (source: carboneer CBAMCC model)

This design incentivises third-country producers to establish robust monitoring, reporting, and verification systems and discourages the use of default values. Over time, companies that fail to transition to verified actual data risk sustained competitive disadvantages in the EU market.

CBAM scope extension: timing, products and CN codes

Beyond operational rules, the Commission has proposed a major expansion of CBAM’s scope to downstream goods, reflecting concerns that carbon leakage could shift further along the value chain. From 1 January 2028, CBAM would cover around 180 additional products – adding roughly 7500 new importers and transforming CBAM into a full-value-chain carbon instrument.

The proposed expansion targets steel- and aluminium-intensive goods, including iron and steel articles, fabricated metals, machinery and industrial equipment, vehicles and components, medical instruments, and metal furniture and buildings (compare Table 2). These products typically contain a high share of steel or aluminium and are at a high risk of carbon leakage. In value terms, they already account for over half of CBAM-relevant imports.

Table 2: Potential CBAM product scope extension according to EU Commission’s proposal

Indicative CN Codes	Product Category	Examples of Products
8407–8409	Engines and Parts	Diesel engines, engine components
8413–8419	Pumps, Burners, Refrigeration, Heat Exchange	Pumps, burners, furnaces, refrigeration and freezing equipment, heat exchangers, cooling towers
8420–8431	Lifting, Conveying, Construction Machinery	Cranes, hoists, winches, conveyors, elevators, lifting systems, construction machinery components
8479	Industrial Machinery & Automation	Industrial robots, automated handling equipment, specialised industrial machines
8501–8504	Electrical Machinery	Electric motors, generators, transformers containing steel or aluminium
8544	Electrical Conductors	Electrical cables and conductors containing steel or aluminium
8701–8708	Vehicles and Vehicle Parts	Trucks (all drivetrains), vehicle chassis, bodies, gearboxes, wheels, axles, selected vehicle parts
Chapter 90	Medical Instruments	Tube needles and gas analysis instruments
Chapter 94	Metal Furniture & Structures	Seats with metal frames, office furniture, shelving, prefabricated buildings containing steel or aluminium

The proposal also strengthens anti-circumvention rules by including pre-consumer steel and aluminium scrap as CBAM precursors, tightening controls on misdeclaration, and allowing the Commission to restrict the use of actual emissions values in high-risk scenarios.

Together, these updates confirm CBAM’s role as a cornerstone of the EU’s climate policy. The coming months, as well as the first reporting deadline on 30 September 2027 for imports during 2026, will show if and how the implementation of CBAM turns embedded emissions and emission intensity of materials and products into procurement-relevant factors. With obligations starting in 2026 and a significant scope extension on the horizon, CBAM is rapidly becoming a central compliance and cost factor for global industrial supply chains.

Download CBAM Default Values & Benchmarks in Spreadsheet Format

22. December 2025/by Hendrik Schuldt

Complying with CBAM is challenging enough for everyone involved. Yet the recently published CBAM Default Values and Benchmarks are not available in a well‑formatted, machine‑readable structure. For project teams working among importers and producers of CBAM goods, this makes analysis slower, more time‑consuming, and unnecessarily frustrating.

The data is provided below in a more accessible spreadsheet format. Hopefully, this helps some teams navigate their CBAM work with greater ease and efficiency. carboneer accepts no liability for the accuracy, completeness or topicality of the data, nor for any consequences of its use.

Download: CBAM Default Values and Benchmarks

If you’re also looking for an opportunity to have carboneer provide clarity on the latest CBAM updates, don’t forget to register for our upcoming webinar on January 8th. Register here:

Webinar: Digesting the latest CBAM updates – Implications for stakeholders.

Hope to see you there!

Impact of the EU ETS and the FuelEU Maritime: Case study for small operators

9. December 2025/by Simon Goess

Small-to-mid-size shipping companies operating several modern feeder vessels now face overlapping carbon regimes: EU ETS which operates as a cap-and-trade system for emissions and drives costs through rising allowance prices; and FuelEU Maritime, which sets absolute greenhouse-gas (GHG) intensity limits on fuel and imposes cascading penalties for non-compliance. Individually, each framework is complex. Together, they demand clarity on the interaction between fuel economics, regulatory costs & penalties, and FuelEU’s flexibility mechanisms that in theory could buffer compliance costs.

Our analysis examines a scenario based on a fleet with three vessels, each a 2,500 TEU (twenty-foot equivalent unit) feeder container ship – the standard of intra-European and short-sea trades e.g. in the Baltic and Mediterranean. Each of three vessels use one type of fuel over the 2025-2029 FuelEU Maritime period: Very Low Sulphur Fuel Oil (VLSFO), biodiesel B30 or biodiesel B100. The example aims to determine what the financial consequences look like for small operators navigating the opening years of EU carbon regulation in shipping, show how pooling mechanics work in practice and which cost savings are possible.

Understanding the framework: Fuel EU vs. EU ETS

The FuelEU Maritime is the EU’s primary instrument for decarbonising maritime transport through fuel GHG intensity limits. The EU ETS in turn operates as a cap-and-trade system and drives decarbonisation through rising carbon prices. Together they form the backbone of the EU’s ambitious decarbonisations efforts in the maritime sector (see summary in Table 1 below and our articles on the EU ETS maritime inclusion and the FuelEU Maritime).

Table 1: Comparison EU ETS vs. FuelEU Maritime

Aspect	EU ETS (incl. maritime transport)	FuelEU Maritime
Regulatory approach	Absolute reduction of GHG emission through a volume cap (Cap-and-Trade system)	Relative reduction of GHG intensity measured per unit of energy consumed onboard
Mechanism	Cap-and-trade: Mandatory purchase and surrender of emission allowances/European Union Allowances (EUAs) for reported emissions	Threshold system: Compliance with annual, gradually decreasing thresholds for GHG intensity starting from 91.16 gCO₂eq/MJ
Scope of application (gases & scope)	Tank-to-wake (TTW): CO₂ from 2024 (phasing in); CH₄ and N₂O from 2026 onwards	Well-to-wake (WTW): All greenhouse gases over the entire life cycle of the fuel
Threshold value	Ships > 5.000 Gross Tonnage (GT)	Ships > 5.000 Gross Tonnage (GT).
Responsible entity	The ‘company’ as defined in the ISM Code (usually the shipowner or an appointed manager)	The ‘company’ as defined by the ISM Code
Penalties for non-compliance	Primary costs: market price of EUAs	Fixed penalty: €2,400 per tonne of very low sulphur fuel oil (VLSFO) equivalent deficit
Additional obligations	No	Mandatory shore power for container and passenger ships in TEN-T² ports from 2030 (penalty for non-use: €1.50 per unused kWh)
Important annual deadlines	31 March: Submission of the verified emissions report 30 September: Surrender of corresponding number of EUAs	31 March: Submission of verified FuelEU report 30 June: Payment of remedial penalties to Administering Authority

Besides the above-mentioned difference, the two regulations also have overlaps. Most importantly they share the THETIS-MRV platform to register emissions. As most shipping companies will have to comply with both regulations at the same time, at least the voyage data, port stay data and energy consumption are largely the same for both regulations.

Methodology and variables

FuelEU measures well-to-wake (WTW) GHG intensity: the total lifecycle emissions per unit of energy consumed onboard, expressed in gCO₂e per megajoule (gCO₂e/MJ). The WTW scope includes emissions from fuel extraction, refining, transport, and combustion – not just what comes out of the smokestack. The 2025-2029 annual target is 89.34 gCO₂e/MJ, a 2% reduction from the 2020 baseline of 91.16 gCO₂e/MJ. Any vessel exceeding this threshold incurs a fixed penalty of €2,400 per tonne of VLSFO-equivalent deficit. Conversely, vessels achieving lower intensity generate compliance surplus, which can be banked forward or pooled across a fleet (see example in Figure 1).

Figure 1: Pooling mechanism of a fleet of three ships, before pooling (left) and after pooling (right) (source: carboneer)

The WTW values for this case study are based on standard value from Intercargo and FuelEU Annex I. Please note that we are calculating with a VLSFO fuel with a higher GHG intensity than the FuelEU assumed threshold of 91,16 gCO₂e/MJ. The value in our case is close the HFO value and we assume that all GHG intensity values include the auxillary engine running on MDO for very vessel and scenario.

At the same time the EU ETS applies a carbon price to the tank-to-wake (TTW) emissions only. In 2026, shipping companies must surrender emission allowances (EUA) for 70% of verified emissions for the year 2025; this coverage increases to 100% from 2027 onwards for e.g. 2026 emissions. EUA prices are market-driven, and for our analysis we assume €80/tonne in 2025, increasing linearly to €100 by 2029. In addition, we also assume a RED conform zero-rating for the biodiesel under the EU ETS.

Case study: Is pooling worth it?

The FuelEU permits vessels to aggregate their compliance balances at the fleet level. Ships within or across companies can combine their annual compliance balances to offset deficits with surpluses. The mechanics are strict: the pool must be registered; the aggregate balance must be non-negative; and no individual ship can worsen (a deficit cannot increase; a surplus cannot flip to a deficit).

Figure 2 illustrates three compliance pathways for a fleet of three identical feeder vessels – one burning VLSFO, one B30 and one B100 – over the period of 2025 and 2029. The difference lies in combination of fuel type and especially pooling strategy.

Figure 2: Results of pooling scenarios on total costs under EU ETS and FuelEU Maritime (source: carboneer)

No Pooling: The baseline

When the three feeders operate independently – with no inter-vessel compliance aggregation – each vessel’s compliance balance is calculated separately. The VLSFO vessel incurs its FuelEU deficit; biofuel vessels generate surpluses. But these surpluses cannot offset the VLSFO deficit because there is no contractual or administrative mechanism linking them. In addition, cost due to the purchase and surrender of allowances under the EU ETS occur. The aggregate 5-year costs amount to:

Fuel cost: €168 million
FuelEU penalty: €6 million
EU ETS cost: €30 million
Total: €204 million

Internal pooling: Aggregating within the fleet

Now we apply internal pooling: The three vessels register as a verified compliance pool. In our example the fleet-level aggregate is non-negative (i.e., total surplus or breakeven), pooling is valid and we assume that the B30 fuelled vessel covers the deficit of the VLSFO vessel with part of its surplus compliance units. While the cost of fuels and the EU ETS remain the same, the FuelEU penalty is eliminated through fleet-level aggregation. This represents a 3 % saving of €6 mil. This is material but not transformative. The fleet has moved compliance responsibility from individual vessels to the fleet level, but it has not yet engaged the external market.

External pooling: Monetising surplus

The third pathway is external pooling: the fleet not only pools internally but also engages the emerging market for compliance surplus units. When a fleet generates surplus compliance units, those surpluses can be sold to third-party pooling administrators or other operators needing to cover deficits. The value of surplus compliance units currently ranges between €200-220 per tonne of CO₂ equivalent.

Figure 2 illustrates the concept: If this pooled fleet sells all aggregated surplus compliance units every year for five years, this effectively creates a revenue of €53 million and thus savings of almost 30% compared to the scenario of no pooling. This highlights the importance of mid- to long term fuel choice in combination with a liquid and well-functioning secondary market for compliance unit surpluses.

Main takeaways

Pooling allows fleet operators to potentially largely eliminate FuelEU penalties. WTW emissions of fuels used will increasingly determine additional costs or even revenues under the FuelEU Maritime Regulation. Also for companies with a smaller number of vessels, pooling strategies will determine whether compliance is a drag on profitability or a managed operational reality.

In an upcoming article we will examine how this plays out in practice by comparing two realistic fleet scenarios: Pool A (all VLSFO, no pooling) vs. Pool B (mixed fuel, strategic pooling).

Authors: Florian Schlennert, Simon Göß

CBAM Benchmarks and Default Values Leaked – How Actual CBAM Data Matters

20. November 2025/by Hendrik Schuldt

Alongside the leaked draft implementing regulation on CBAM verification (see our article on CBAM verification), new information vital for the definitive CBAM phase from 2026 has surfaced in recent days. Most notably, details have emerged regarding the calculation of free allocation adjustments that in part determine CBAM certificate purchase requirements, featuring preliminary CBAM benchmarks and a new set of country-specific default values. These default values will be essential for CBAM reporting when importers lack access to verified data from their suppliers.

This article explores the implications of these CBAM updates for importers’ cost exposure. The analysis is based on leaked documentation and should be considered preliminary.

Updates on CBAM Benchmarks

CBAM benchmarks are central to determining the costs associated with importing CBAM goods. They are grounded in benchmarks applied in the European Emission Trading System (EU ETS), reflecting the emission intensity of the most efficient EU facilities. EU ETS benchmarks are designed to ensure that producers covered by the EU ETS do not pay CO₂ costs for emissions up to benchmark levels. For CBAM, establishing a level playing field requires that this exemption be factored into the calculation of the CBAM surcharge applicable to imported goods.

This is managed through the CBAM benchmark deduction: benchmarks are subtracted from embedded emissions to calculate the importer’s CBAM certificate obligations. More on the calculation methodology can be found in our article on Effective CBAM Cost Management. While the European Commission has yet to release the final CBAM benchmarks, the leaked values offer an early insight into what to expect from 2026:

Applicable CBAM benchmarks will depend on the production processes underlying each CBAM good. When suppliers report emissions, they will assemble a benchmark profile representing the entire process chain. For example, in the iron and steel sector, separate benchmarks exist for steps like melting, continuous casting, and rolling.
For some goods, CBAM benchmarks will change from 2028 due to adjustments in the methodology of the underlying EU ETS benchmarks.
Absent actual data, a country-specific ‘default’ benchmark will be applied, reflecting the primary production route in the country of production. For iron and steel, this means differentiated benchmarks for BF-BOF, DRI/EAF, and Scrap/EAF production. Similar distinctions, such as between primary and secondary aluminium, are intended to address issues like the aluminium scrap loophole. However, which production route and benchmark must be used for a specific country has not yet been disclosed.

All leaked CBAM benchmarks remain provisional and will be updated following the revision of the EU ETS benchmarks for 2026–2030. Early analysis suggests a significant decrease in CBAM benchmarks for some production routes compared to initial expectations. We take this expected decrease in EU ETS and consequently CBAM benchmarks into account for the example presented below.

Updates on Default Values

When importers cannot obtain verified (!) CBAM data from suppliers, default values must be used in CBAM declarations. These values are based on the average emission intensity for a product from a particular country and are further increased by a mark-up before use. To date, there is no official confirmation of the precise mark-up, which is expected to be set in a forthcoming regulation in Q4 2025. Based on communications with various sources, carboneer expects an average mark-up of 30 percent. If no country-specific default exists, importers apply the average value among the ten countries with the highest defaults for the product code in question.

In 2023, the JRC published average emission intensities for key trading partners, aiming to cover countries that cumulatively represent over 90% of EU imports per sector. The leak reveals a substantial expansion of country coverage, with values now available for 132 countries. However, not every country, sector, or CN code is included for each country.

CBAM Default Values - Country Coverage Comparison

Figure 1: Countries highlighted in green have available leaked default values for at least one CBAM sector. Source: JRC Report.

The new set of country-specific values show that the differences in CBAM cost for products from different countries can be large and the additional mark-up could potentially amplify these differences.

Impact on CBAM Costs: An Example

To illustrate the impact of the updates on CBAM Benchmarks and default values, consider the following scenario:

A company imports 10,000 tons per year of tubes and pipes from both China and India (CN category 7305) in 2026.
Lacking actual supplier data, the importer resorts to default values: 1.84 t CO₂/t for China and 4.32 t CO₂/t for India (before any mark-up). Applying a 30% uniform mark-up increases these figures.
The CBAM benchmark is 1.543 t CO₂/t, assuming the BF-BOF production route and a 6% reduction following the adjustment of EU ETS benchmarks in 2026.
CBAM certificate prices are forecast between €90 and €110 for 2026.

Model results indicate 2026 imports from China would generate CBAM certificate costs of approximately €800,000 to €975,000 (i.e., €80–97.5 per ton), and from India, €3,700,000 to €4,520,000 (or €370–452 per ton).

The Value of Actual CBAM Data

With the leaked default values and benchmarks, the value of actual CBAM data from suppliers becomes more apparent. In this calculation, we assume that production processes in both countries correspond to those used to establish the default CBAM benchmark, meaning the same CBAM benchmark applies. If Chinese and Indian suppliers can provide verified emission data matching the country average (i.e., before the mark-up), CBAM costs on Chinese imports in 2026 drop to €300,000–€370,000, and on Indian imports to €2,530,000–€3,100,000.

Figure 2 presents a comparison of CBAM costs for imports in both 2026 and 2034, based on constant import volumes and projected certificate prices between €99 and €224 for 2034. Blue bars represent costs calculated using default values, while green bars illustrate outcomes with actual supplier data. The green scenarios highlight the relative savings achieved by avoiding the 30 percent mark-up.

CBAM Exposure - Actual Data and Default Values

Figure 2: Estimated CBAM certificate costs for imports of tubes and pipes (CN Code 7305) from China and India using default values (blue) and actual values at the country-specific emission intensity (green). Source: carboneer CBAMCC Model.

In absolute terms, switching from default values to actual data yields greater cost reductions for Indian imports. This is primarily because the uniform 30 percent mark-up leads to a higher penalty for countries with greater underlying emission intensities. However, in relative terms, the CBAM benchmark’s non-linear effect is key: actual supplier data reduces CBAM costs by 62% for Chinese imports and 32% for Indian imports. This potentially counter-intuitive result stems from the fact that the verified emission value for Chinese suppliers (1.84 tCO₂/t) is already close to the CBAM benchmark (1.543 tCO₂/t), meaning liabilities nearly disappear. In contrast, for Indian suppliers, the national average (4.32 tCO₂/t) remains well above the benchmark, so savings are significant but less dramatic as a share of total cost.

Summary and Next Steps

The leak of CBAM benchmarks provided some added transparency to the calculation rules for CBAM emissions and costs. While complexities increase, importers, traders and producers are now better positioned to estimate their CBAM exposure and prepare for the definitive phase starting from 2026.

The utilisation of default values might be highly punishing for imports of certain goods from some countries. A structured and clear overview of the cost implications under different scenarios is therefore required for importers to make strategic decisions on purchasing and supplier interaction. Cost-conscious importers should investigate the potential of reducing their CBAM exposure by supporting their suppliers to deliver verified CBAM data.

carboneer offers CBAM cost modelling and management services to help importers and exporters of CBAM goods navigate compliance and maximise cost efficiency. With hands-on experience supporting over 150 producers, carboneer assists companies in sourcing robust CBAM data and developing verification-ready monitoring systems throughout their supply chain. Thanks to this proactive approach, some importing clients now benefit from seamless access to actual emission data across their entire supply chain. For tailored strategies to reduce CBAM exposure and enhance your company’s long-term competitiveness, reach out to discover how carboneer can support your business.

Leaked Document: Draft for Verification Principles under CBAM

12. November 2025/by Hendrik Schuldt

Verification represents a cornerstone of the EU Carbon Border Adjustment Mechanism (CBAM) and is vital to ensuring full regulatory compliance. Accredited third-party verifiers validate emissions data provided by producers, enabling EU importers to base their annual CBAM declarations and related CBAM cost calculations on actual data instead of costly default values.

This article summarises the verification principles and methods outlined in a leaked draft by the EU Commission of an upcoming implementing regulation. While closely aligned with practices under the EU Emissions Trading System (EU ETS) and current CBAM rules, the draft remains provisional and subject to refinement during the ongoing legislative process.

Two Key CBAM Regulations Still Pending

Two key implementing regulations for CBAM verification remain pending, and their adoption is central for operationalising CBAM. The first act will formalize who can serve as an accredited verifier, setting requirements for their approval and registration. The second, a draft of which has now been leaked, will establish the detailed verification principles, procedures, and workflow. These acts were originally expected by late 2024 but have been delayed. Clarity on these rules is crucial for importers, producers, and compliance teams, as they underpin eligibility, risk management, and the operational structure of CBAM verification.

General Verification Procedure

CBAM verification procedures largely mirror those under the EU ETS, fostering a level playing field between EU and non-EU producers in carbon pricing:

Non-EU producers monitor and report emissions following standardized CBAM methodologies
Verifiers conduct risk assessments, on-site or virtual plant visits, and detailed data reviews
Material misstatements or non-conformities result in failed verification, excluding the data from importers’ CBAM declarations
Non-material issues must be corrected before the final verification report is issued

Verification is required each reporting period, typically on an annual basis. Positive reports or those with minor rectified issues can be relied upon by importers for their annual submission of CBAM declarations.

On-Site and Virtual Site Visits

For the first reporting period of the definitive CBAM application in 2026, each installation producing CBAM goods requires a physical site visit from an accredited verifier. From the second reporting period onward, physical site visits must occur at least every other reporting period. Between these, site visits may be conducted virtually or even waived if strict criteria are met: negligible risk, no major changes at the site or monitoring procedure, and comprehensive remote documentation are required for this flexibility.

Physical visits can never be skipped for two consecutive reporting periods. However, serious, extraordinary, and unforeseeable events (such as disasters or border closures) allow for a virtual site visit as a substitute in these cases, provided the verifier’s risk analysis supports this approach and remote records are adequate.

Materiality Levels

Materiality thresholds define the boundaries for tolerable errors in emissions data. The standard is a 5% threshold per CN code, either for total specific embedded emissions or for specific free allocation. Minor inaccuracies below these levels are not considered reason for verification failure, though verifiers can use expert judgement to identify non-material issues that compound together to a material issue.

Default Values and Reporting Chains

According to the draft regulation, verification is possible even if default values are used for part of the CBAM supply chain, notably for precursors when actual data cannot be supplied. The verifier’s report must document all relevant details, including CN codes, country of origin, and default emissions, preserving the chain of verification. Thus, the use of default values does not break eligibility for using the verified emissions data in CBAM declarations, provided information requirements are met.

What Must Be Included in a CBAM Verification Report?

The CBAM verification report is standardized and comprehensive, containing all data points needed for declaring actual emission figures in importers’ annual CBAM declarations. The verification reports cover:

Operator and verifier identification
Site visit logs and monitoring summaries
Direct and indirect emissions calculations
Detailed product, process, and CN code data
Origin and CBAM benchmark determinations

Additionally, the report must disclose material misstatements and non-conformities, corrective actions taken, unresolved issues, and recommendations to improve future data quality. This facilitates regulatory assurance as well as continuous improvement.

All verification reports must be submitted using a forthcoming, standardized electronic template that will be provided by the European Commission and accessed through the CBAM Registry. This digital format will allow automated solutions such as carboneer’s cbam.hub to seamlessly query verified CBAM data directly from the supply chains of importers, streamlining compliance and the submission of CBAM declarations by the importers.

Outlook

While the above rules are drawn from a leaked draft and will likely be revised, they indicate the current direction and meet the expectations of CBAM and EU ETS experts. The pressure is now on the Commission to adopt overdue implementing regulations regarding emissions monitoring, reporting and verification to further operationalize CBAM:

one for the calculation of embedded emissions during the definitive period (from 2026),
one for verifier accreditation,
one for verification principles and procedures.

Final adoption will enable verifiers and producers to prepare effectively and avert bottlenecks that would force importers to rely on default data, increasing their CBAM costs unnecessarily.

CBAM simplifications in force: What companies need to know now

3. November 2025/by Hendrik Schuldt

Since 20 October 2025, the new EU regulation (2025/2083) on the simplification of the CBAM system has been in force. In this article, we explain the most important changes for importers and producers of CBAM goods.

Key Amendments at a Glance

De Minimis Exemption: Companies importing less than 50 tonnes of CBAM goods annually into the EU during 2026 are fully exempt from CBAM reporting obligations. This exemption does not apply to imports of hydrogen and electricity. In 2025, the de minimis rule of 150 euros per delivery continues to apply.
Mandatory Authorization from 2026: Starting in 2026, companies intending to import more than 50 tonnes of CBAM goods annually into the EU must obtain the status of “Authorized CBAM Declarant.” Applications must be submitted no later than 31 March 2026 to avoid penalties and import restrictions.
Commencement of Certificate Trading: Trading of CBAM certificates via the Common Central Platform (CCP) will begin on 1 February 2027. However, certificates must already be acquired for imports made in 2026 and submitted in 2027.

Below, we present the key changes in detail. You may find all changes in the CBAM Omnibus regulation when compared to the original CBAM regulation, which has been amended by the simplifications.

New Threshold: Single-Mass-Based Threshold

To determine CBAM obligations, the newly introduced Single Mass-Based Threshold (MBS) now applies. Companies whose annual CBAM goods imports fall below this threshold are fully exempt from CBAM requirements. The MBS is calibrated to capture at least 99% of imported grey emissions in CBAM goods (based on standard values). The European Commission will review and, if necessary, adjust the threshold annually. Any changes apply from the following year, provided the adjustment amounts to at least 15 tonnes. For 2026, the MBS is set at 50 tonnes of CBAM goods. If the threshold is exceeded during a calendar year, CBAM obligations apply retroactively to all imports of that year, including those below the threshold. In 2025, the de minimis rule of 150 euros per delivery continues to apply. We recommend that EU importers contact the national authorities in their respective countries to obtain detailed information on the reporting requirements for the remaining time of the transitional period.

Application Process: Authorized CBAM Declarant

Importers may import CBAM goods in 2026 without having obtained Authorized CBAM Declarant status, provided the application is duly submitted by 31 March 2026. If the application is rejected and CBAM goods exceeding the MBS were imported, penalties will apply to all imports made in 2026 (see section on Sanctions).

Updates to Certificate Management

CBAM certificates may only be acquired from 1 February 2027 via the Common Central Platform (CCP). No acquisition will be possible prior to this date. Nonetheless, certificates must be obtained for 2026 imports and submitted in 2027. Thus, procurement of certificates for 2026 imports will occur retroactively in 2027. Certificate prices for 2026 imports will be based on the average quarterly prices in the EU Emissions Trading System 1 (EU ETS 1) during that year. From 2027 onward, importers must demonstrate, on a quarterly basis, a security reserve of CBAM certificates equivalent to 50% of the grey emissions imported during the current calendar year.

Revised Deadlines

The regulation introduces the following changes to deadlines:

Submission of CBAM Declarations and Certificates: No later than 30 September of the following year.
Buyback Requests for CBAM Certificates: Must be submitted by 31 October, provided any certificates were submitted during the current year. A maximum of certificates equivalent to the 50% security reserve may be returned. If the MBS was not exceeded, full return is permitted.
Certificate Expiry: Certificates from the penultimate calendar year will expire on 1 November, thereby significantly extending their validity period.

Emissions Calculation and Paid CO₂ Prices

Beginning in 2026, importers will have the flexibility to either report actual and verified CBAM data from their supply chains or rely on default values. Unverified actual data is must not be used in CBAM declarations. The European Commission is expected to publish the applicable default values for the definitive period, covering multiple countries. These values will include a penalizing mark-up designed to incentivize the use of verified actual data. In cases where no default value is available for a specific CN code and country, importers must apply the average default value of the ten worst-performing exporting countries.

Precursors originating from the EU are considered emission-free and are no longer included in CBAM emissions calculations. Effectively paid CO₂ prices along the supply chain (less any refunds or discounts) may still be credited. The EU will introduce country-specific standard values for effectively paid CO₂ prices, which may be used in the absence of verifiable actual data.

Sanctions

Sanctions continue to be aligned with the EU ETS 1 regulations (currently approx. €135 per tonne of CO₂ not reported or incorrectly reported). National authorities may reduce penalties if the error is demonstrably attributable to external auditors or foreign authorities. Payment of a penalty does not exempt the importer from submitting the required CBAM certificates.

Companies importing CBAM goods without Authorized CBAM Declarant status face significantly higher penalties: three to five times the standard rate. In such cases, the obligation to submit CBAM certificates retroactively is waived. A reduction in penalties is possible if the MBS was exceeded by less than 10%.

Conclusions

The so-called CBAM simplifications do not genuinely make the rules easier for affected importers. However, a large part of those previously affected will no longer fall under CBAM, which especially relieves smaller importers and SMEs. For producers, emission calculations become less demanding when using CBAM goods from the EU as input. Companies that remain subject to CBAM continue to face uncertainties due to the pending CBAM benchmarks, verification rules for actual data, and the yet-to-be-defined default values valid from 2026. The EU Commission is now required to clarify these issues swiftly to provide planning security and a smoother transition to the regular phase. In our blog post on CBAM cost management, you can read about options for limiting cost risks in advance.

EU ETS Maritime: Obligations and Options for Action for Maritime Transport (Part 2)

7. August 2025/by Simon Goess

In the first part of this series on emissions trading in the maritime sector, we outlined the principles of the obligations. In this second part, we explain market developments in the EU ETS and the complementary FuelEU Maritime Regulation on reducing greenhouse gases in fuels.

Market and price developments for emission allowances

The European Energy Exchange (EEX) based in Leipzig and the ICE based in London act as central marketplaces for the procurement and trading of emission allowances in the EU ETS (EUAs). The EEX handles both primary and secondary market transactions, while the ICE serves the secondary market. In the primary market, all new EUAs are issued through standardised auctions, while in the secondary market there are spot and futures contracts for EU ETS obligations, intermediaries, traders and financial investors. The average EUA price in 2024 was around EUR 67/tCO2 (source: DEHSt). Analysts forecast an increase to up to EUR 200/t in the coming years (Figure 1). Price dynamics are determined by five structural drivers:

Stricter cap reduction: The linear reduction factor of 4.3% (2024–2027) and 4.4% (from 2028) will lead to a constant annual reduction of around 88 million EUAs from 2024 onwards
The gradual inclusion of shipping will bring up to 78.4 million additional EUAs into the system
Market Stability Reserve (MSR): If a threshold for surplus EUAs is exceeded, the MSR will withdraw and delete part of the surplus
REPowerEU auctions: The programme will weigh on price developments in the short term due to additional auction volumes of around 267 million EUAs between 2023 and 2026, but will lead to a correspondingly sharper supply reductions from 2027 onwards
Geopolitical factors: The war in Ukraine and energy price volatility are influencing EUA prices via temporarily very high correlations between gas and EUA prices, while the adoption of the ‘Fit for 55’ package has strengthened market confidence in long-term price increases

Figure 1: Historical price development and price scenarios for EUAs until 2030 (source: carboneer, data source: EEX)

Impact of emissions pricing and possible hedging

In 2024, the financial impact of the EU ETS on shipping was still limited, despite administrative burdens. As only 40% of emissions were covered by the EU ETS, the average price per tonne of CO2 actually emitted by ships was just over EUR 25. For a ship fuelled with bunker oil, the costs for intra-Community voyages (100% coverage) increased by around 15% for entries into or exits from the EU/EEA area (50% coverage) by 7.5% (assumptions for bunker oil, price: EUR 500/t and emission intensity: 3.1 tCO2/t) Thus, the additional EU ETS costs probably did not have a major impact on the route choices made by shipping companies. Detours via Africa to avoid the Suez Canal or increased tensions in the Strait of Hormuz leading to higher insurance costs probably posed a greater economic challenge for many companies.

In 2025, the emissions covered by the EU ETS will rise to 70%. With bunker oil prices remaining constant and an assumed EUA price of EUR 70/t, CO₂ costs will double. Similarly, the coverage of all emissions from 2026 onwards will be accompanied by a further significant increase in the financial burden. Systematically hedging these price risks by purchasing emission allowances via spot or futures market contracts can both reduce price risk and secure future EUA requirements for shipping companies. The optimal strategy depends on the individual risk profile, emission volatility and available financing resources. In view of the forecast price increases for EUAs, tailor-made procurement and hedging approaches are becoming increasingly important for affected shipping companies.

With the expansion of the EU ETS to maritime shipping, charter agreements along the entire charter party chain must be redesigned. The decisive factor is who assumes operational responsibility for cargo, route or speed (often the charterer), as only this party can be held liable by the shipping company for the costs of emission allowances. Charter contracts should therefore clearly stipulate who is liable for emission costs during the various phases of the voyage and how any deviations are to be settled.

FuelEU Maritime: Complementary rules for fuels

On 1 January 2025, the FuelEU Maritime Regulation (EU) 2023/1805 came into force (source: EU) and supplements the EU ETS for ships over 5,000 gross tonnage. While the EU ETS prices absolute CO₂ quantities via a cap-and-trade system, FuelEU Maritime aims to gradually reduce the greenhouse gas intensity of on-board energy, in particular fuels. The binding reduction targets are 2% by 2025, 6% by 2030, 14.5% by 2035 and 80% by 2050. FuelEU Maritime uses a well-to-wake approach that evaluates emissions from raw material extraction to combustion on board. Alternative fuels such as biofuels or e-fuels are accounted for in a comparable manner using standardised emission factors. If a ship falls short of its annual intensity target, penalties of 2,400 EUR per tonne of VLSFO equivalent deficit will be imposed. Bunker oil or Very Low Sulphur Fuel Oil (VLSFO) serves as the basis for calculation due to its market dominance. From 1 January 2030, container and passenger ships in TEN-T (Trans-European Transport Network) ports must use shore power during layovers, with violations costing 1.50 EUR per unused kWh.

Both systems complement each other: the EU ETS limits and prices emissions, while FuelEU creates incentives for lower-emission fuels. In a further article, we will take a detailed look at the fundamentals and implications of FuelEU Maritime.

Conclusion and recommendations for action

Inclusion in the EU ETS presents shipping companies with complex challenges in the areas of emissions measurement, procurement of emission allowances and cost pass-through. The gradual introduction and supplementation with FuelEU Maritime is intended to effectively reduce emissions in maritime transport.

Risks due to administrative burdens, penalties or volatile prices in the EU ETS can be minimised through proactive and strategic planning and actions. A possible guide for action for shipping companies subject to the scheme is shown in Figure 2.

Figure 2: Action guide for shipping companies in the EU ETS and FuelEU Maritime (source: carboneer)

Contact carboneer for personalised advice and we will assist you with implementation and risk analysis.

Sources

DEHSt, 2025, VET-Bericht 2024, URL: https://www.dehst.de/SharedDocs/downloads/DE/publikationen/VET-Bericht-2024.pdf?__blob=publicationFile&v=7

EEX, 2025, EU ETS Auctions, URL: https://www.eex.com/en/market-data/market-data-hub/environmentals/eu-ets-auctions

EU, 2023, FuelEU Maritime Regulation, URL: https://eur-lex.europa.eu/eli/reg/2023/1805/oj/eng