EU CBAM Carbon Price Deduction: The Compliance Manager’s Evidence Framework for Claiming Third-Country Carbon Costs
- CBAM Research Team
- Aug 24
- 36 min read
Updated: Aug 25
Scope & Disclaimer
This report provides regulatory intelligence and compliance guidance on the EU CBAM carbon price deduction mechanism under Article 9 of Regulation (EU) 2023/956. It does not constitute legal, financial, investment, engineering, or safety-certification advice. Named companies are referenced as illustrative case studies only; CBAM Journal does not endorse any company or product. Company-claimed figures are identified as such. Readers should not rely on this report as a substitute for independent professional advice tailored to their specific circumstances. Full terms: cbamjournal.com/disclaimer.
1. Executive Summary
1.1 What the Compliance Manager Needs to Know
FINDING: The Q2 2026 EU CBAM certificate price was €75.28/tCO₂, meaning every tonne of embedded carbon for which an eligible third-country carbon price cannot be evidenced and deducted represents a direct certificate cost at that rate.
SO WHAT: For an importer whose supplier operates under an emerging-market carbon pricing scheme, the difference between a successfully claimed Article 9 deduction and a failed one is a financial exposure measured in tens of euros per tonne of imported goods, multiplied across every shipment from 1 January 2026 onwards.
NOW WHAT: Compliance teams must begin building the Article 9 evidence chain during 2026, because the transactions, payment records, and supplier certifications that support the first declaration arise during this year, not in 2027 when the declaration is filed — complete the evidence architecture before year-end 2026 (this is a best-practice operational deadline, not a statutory date; the first regulatory filing deadline is 30 September 2027).
At €75.28/tCO₂ — the Q2 2026 EU CBAM certificate price — every tonne of embedded carbon for which an Article 9 deduction cannot be evidenced represents a measurable financial obligation; the nine-stage evidence chain required to claim that deduction must be assembled during 2026, the year in which the underlying transactions occur. The Commission’s implementing act on proof of payment, currency conversion, and certifier eligibility closed public consultation on 10 June 2026 without adoption, leaving those operational mechanics unresolved at the research cut-off. The UK’s Carbon Price Relief mechanism under Finance Act 2026, section 150, is more operationally advanced — HMRC published detailed guidance on 16 July 2026 — but it operates on a separate timeline, uses a distinct evidence form, and cannot be satisfied by the same framework built for EU Article 9.
Five points for the Compliance Manager before reading further:
1. Article 9 of Regulation (EU) 2023/956 creates a statutory entitlement to reduce CBAM certificates where a carbon price has been effectively paid in a third country — but the entitlement is conditional on meeting a specific evidence chain.
2. The existence of a carbon pricing scheme in an exporting country does not automatically make a deduction claimable. The carbon price must have been effectively paid, rebates and compensation must be taken into account, and independent certification is required.
3. The European Commission’s implementing act on proof of payment, currency conversion, and certifier eligibility was in consultation as of 10 June 2026. Some operational mechanics of Article 9 are still being finalised.
4. The UK’s equivalent mechanism — Carbon Price Relief under Finance Act 2026, section 150 — operates on a different timeline, uses a different evidence form, and carries a six-year record-retention obligation rather than the EU’s four-year rule.
5. 2026 is the evidence-building year. The first financial CBAM declaration for 2026 imports is due 30 September 2027. Reconstructing evidence retrospectively in 2027 carries substantial compliance risk.
1.2 The Nine-Stage Evidence Chain
FINDING: Article 9 of Regulation (EU) 2023/956 requires the authorised CBAM declarant to demonstrate, through independently certified documentation, that embedded emissions were subject to a carbon price effectively paid in a third country, with rebates and compensation taken into account — with the first financial test of this evidence chain at the 30 September 2027 declaration for 2026 imports.
SO WHAT: A carbon pricing scheme existing in a third country is the starting point, not the endpoint — the compliance burden runs from eligibility assessment through to audit-defence documentation.
NOW WHAT: Compliance teams must implement all nine stages of the evidence chain before submitting the first deduction claim for 2026 imports, with supporting evidence assembled before year-end 2026 and the declaration due 30 September 2027.
The Nine-Stage Evidence Chain is the operating framework for this report:
Stage 1 — Eligibility: Does the third country’s carbon pricing mechanism satisfy Article 9 conditions?
Stage 2 — Payment: Was the carbon price effectively paid by the relevant installation?
Stage 3 — Emissions Linkage: Can the payment be connected to the specific embedded emissions in the imported goods?
Stage 4 — Rebates/Compensation: Have any rebates, free allocations, or other compensation reducing the effective carbon price been identified and deducted?
Stage 5 — Certification: Has an independent person certified the documentation?
Stage 6 — Currency Conversion: Has the foreign-currency carbon price been converted to euros using the applicable methodology?
Stage 7 — Records: Are all documents retained in an auditable archive?
Stage 8 — Declaration: Is the deduction correctly entered in the annual CBAM declaration?
Stage 9 — Audit Defence: Can the evidence chain withstand EU customs authority scrutiny after filing?
1.3 What Is Binding — and What Is Still Being Operationalised?
FINDING: The Commission published its draft implementing act on third-country carbon prices on 13 May 2026, with a public consultation window closing 10 June 2026 — meaning the operational mechanics covering proof of payment, currency conversion, and certifier eligibility had not been adopted as final EU law at the research cut-off.
SO WHAT: Compliance teams that build internal procedures around the draft provisions risk rework once the implementing act is adopted in its final form.
NOW WHAT: Establish a regulatory-change monitoring protocol focused on the Commission’s DG TAXUD CBAM legislation page, and freeze internal evidence procedures only after confirming final implementing-act adoption — which must occur before 30 September 2027.
Three categories of legal authority govern every compliance decision in this report:
Binding EU law: Regulation (EU) 2023/956 and its amendments, including Regulation (EU) 2025/2083. Requirements under these instruments are treated as confirmed obligations. (for a full overview of the definitive regime obligations, see EU CBAM Definitive Regime 2026)
Commission implementation work: Draft provisions covering proof of payment, currency conversion, and certifier eligibility — in consultation as of 10 June 2026. These are signposted as proposed, not final.
UK guidance: HMRC published detailed Carbon Price Relief operational guidance on 16 July 2026 — more operationally advanced at the research cut-off than the EU’s implementing framework.
2. Regulatory Context — What EU CBAM Article 9 Actually Requires
2.1 Article 9: The Legal Basis for the Deduction
FINDING: Article 9(1) of Regulation (EU) 2023/956 gives an authorised CBAM declarant a statutory entitlement to reduce the number of certificates to be surrendered by the number corresponding to a carbon price effectively paid in a third country on the declared embedded emissions — at Q2 2026 certificate prices of €75.28/tCO₂, that entitlement has direct financial value for every qualifying tonne.
SO WHAT: The deduction is a legal right embedded in the CBAM Regulation, not a discretionary commercial offset — but exercising it requires satisfying the evidence conditions precisely as set out in Articles 9(1) through 9(5).
NOW WHAT: For every supplier relationship where a third-country carbon price may be relevant, confirm Article 9(1) eligibility conditions are met before including any carbon cost in the deduction calculation — and before year-end 2026 for 2026 import transactions.
Article 9(1) establishes two parallel conditions: the carbon price must have been effectively paid, and any rebates or other compensation reducing that price must be taken into account. Both conditions operate simultaneously. A supplier paying a carbon tax does not satisfy Article 9 if it also received a free allocation or rebate that reduced the net cost — the deductible amount is the net effectively paid price, not the gross statutory liability.
The European Commission’s official Questions and Answers confirm the policy intent directly:
“the effective carbon prices paid outside the EU will be deducted from the adjustment to avoid a double price.”
The deduction is calculated as a reduction in the number of CBAM certificates — it operates at the certificate level, not as a separate cash rebate or monetary credit. The financial benefit is realised at the point of certificate surrender, due 30 September 2027, not at the point of import.
Table 1 — Article 9 Legal Requirements: Summary Matrix
Requirement | Article / Source | Evidence required | Responsible party |
Carbon price effectively paid | Art. 9(1), Reg. (EU) 2023/956 | Payment documentation | Authorised CBAM declarant |
Rebates/compensation accounted for | Art. 9(1) | Rebate records, supplier declaration | Declarant + supplier |
Documentation of embedded emissions subject to carbon price | Art. 9(2) | Certified documentation | Declarant |
Evidence of actual payment | Art. 9(2) | Payment records | Declarant |
Certified by independent person | Art. 9(2) | Certification with certifier name and contact | Independent certifier |
Records retained 4 years post-declaration | Art. 9(3) | Retained archive | Declarant |
2.2 “Carbon Price Exists” vs “Carbon Price Is Deductible”
FINDING: Article 9 specifies that the carbon price must have been effectively paid and that rebates or other compensation reducing that price must be taken into account — the existence of a carbon pricing scheme in an exporting country is a necessary but not sufficient condition for claiming the deduction, a distinction that Article 9(2)’s mandatory independent certification requirement enforces at the point of claim.
SO WHAT: An importer whose supplier operates in a country with a carbon tax or ETS cannot assume a deduction is available without verifying that the specific installation paid the carbon price and that no offsetting rebate or free allocation reduced the net amount paid.
NOW WHAT: Before requesting any certification, apply the eligibility decision gate to each supplier relationship — completing this assessment for all 2026 import transactions before year-end 2026.
A qualifying carbon-pricing mechanism in the exporting country is the starting condition, not the conclusion. The eligibility determination for each deduction claim must address four questions sequentially:
1. Does a qualifying carbon-pricing mechanism apply in the exporting country?
2. Does the relevant installation fall within that mechanism’s coverage?
3. Has the carbon price been effectively paid by the installation (not merely accrued or reported as a liability)?
4. Have any rebates, free allocations, or compensation mechanisms been identified and deducted to establish the net effectively paid price?
India’s Carbon Credit Trading Scheme illustrates the eligibility question for steel importers. Whether installations exporting goods to the EU fall within the scheme, at what price, and whether the scheme constitutes an eligible carbon-pricing mechanism under Article 9(1) cannot be answered in general — each requires supplier-specific primary evidence. Beijing Shougang’s 2025 annual report states that China’s steel industry entered the national carbon market in 2025, creating the same eligibility-assessment question for Chinese-origin steel importers.
2.3 Actual Carbon Price vs Default Carbon Price
FINDING: Article 9(4), as amended by Regulation (EU) 2025/2083, permits the use of yearly default carbon prices where a third country has qualifying carbon-pricing rules and the Commission determines a default price — with the Commission potentially publishing these default prices in the CBAM Registry from 2027.
SO WHAT: Importers may face a choice between the actual-price route (full evidence chain, reflecting the specific carbon cost paid) and the default-price route (simpler evidence requirement, but default prices had not been published at the research cut-off).
NOW WHAT: Build an actual-versus-default route assessment into 2026 compliance planning, and monitor the Commission CBAM Registry for default price publications before making route decisions for the 30 September 2027 declaration.
Table 2 — Actual Price vs Default Price Route Comparison
Criterion | Actual-price route | Default-price route |
Legal basis | Art. 9(1)–9(3), Reg. (EU) 2023/956 | Art. 9(4), as amended by Reg. (EU) 2025/2083 |
Evidence burden | Full: payment, emissions linkage, rebates, certification | Lighter: qualifying country and price confirmed by Commission |
Availability | Available now for eligible schemes | Default prices not yet published (expected from 2027) |
Financial outcome | Reflects actual foreign carbon cost paid | Default price may differ from actual cost paid |
Risk profile | Evidence chain failure can invalidate claim | Dependent on Commission determination of qualifying country |
2.4 Commission Implementation: Proof, Currency and Certification
FINDING: The Commission published a draft implementing act addressing proof of payment, currency conversion, and third-party certifier eligibility on 13 May 2026, and the public consultation closed 10 June 2026 — this act was in development, not adopted, at the research cut-off.
SO WHAT: Several operational mechanics that Compliance Managers need to build procedures around — specifically how to evidence payment, which exchange rate to apply, and who qualifies as an independent certifier — had not been finalised in binding EU law at the research cut-off.
NOW WHAT: Do not lock internal evidence procedures or certifier contracts to the draft provisions until the final implementing act is published on the Commission DG TAXUD CBAM legislation page — monitor and update before the 30 September 2027 declaration.
The draft act’s provision requiring accreditation to EN ISO/IEC 17029:2019 gives Compliance Managers a working benchmark for certifier pre-selection, pending final rule adoption. The draft indicates that an independent person certifying the carbon price must be accredited for the relevant scope and must satisfy independence tests from the operator, EU authorities, and relevant third-country authorities. These are proposed provisions that may be amended before adoption.
Table 3 — Legal Status of Article 9 Provisions at Research Cut-Off
Provision | Status | Source | What could change |
Art. 9(1) — deduction entitlement | Binding EU law | Reg. (EU) 2023/956 | None — settled |
Art. 9(2) — documentation requirements | Binding EU law | Reg. (EU) 2023/956 | None — settled |
Art. 9(3) — record retention (4 years) | Binding EU law | Reg. (EU) 2023/956 | None — settled |
Art. 9(4) — default price route | Binding EU law | Reg. (EU) 2025/2083 | Default prices not yet published |
Art. 9(5) — implementing rules empowerment | Empowerment provision | Reg. (EU) 2023/956 | Full detail subject to final act |
Proof of payment mechanics | Draft — in consultation | Commission, 13 May 2026 | May be amended before adoption |
Currency conversion methodology | Draft — in consultation | Commission, 13 May 2026 | May be amended before adoption |
Certifier eligibility criteria | Draft — in consultation | Commission, 13 May 2026 | May be amended before adoption |
3. Compliance Obligations — The Evidence the Buyer Must Build
3.1 The Article 9 Evidence Pack
FINDING: Article 9(2) of Regulation (EU) 2023/956 requires the authorised CBAM declarant to retain documentation demonstrating that embedded emissions were subject to a carbon price effectively paid, evidence concerning rebates or compensation, references to the relevant third-country legislation, and evidence of actual payment — all certified by an independent person whose name and contact information must appear in the documentation.
SO WHAT: Missing any single component of this documentation — particularly the independent certification or the actual payment evidence — can undermine the evidentiary basis for the entire deduction claim for the affected shipments.
NOW WHAT: Issue a standardised supplier evidence request covering all Article 9(2) components to every supplier where a carbon-price deduction is intended, completing the collection process before year-end 2026 for 2026 import transactions.
Table 4 — Article 9 Evidence Pack Matrix
Document | Supplier provides | Certifier verifies | What it proves | Mandatory? | Risk if missing |
Carbon-pricing scheme documentation | Yes | Confirms scheme existence | Qualifying mechanism exists | Yes | Deduction ineligible |
Installation coverage confirmation | Yes | Confirms coverage | Installation within scheme | Yes | Deduction ineligible |
Carbon price assessment | Yes | Verifies calculation | Price applicable to emissions | Yes | Amount unverified |
Rebate/compensation declaration | Yes | Confirms net price | Effective price after rebates | Yes | Amount overstated |
Evidence of actual payment | Yes | Confirms payment occurred | Carbon cost effectively paid | Yes | Core condition not met |
Emissions linkage documentation | Yes | Verifies connection | Payment linked to declared embedded emissions | Yes | Chain broken |
Independent certification | No | Certifier provides | All above elements verified | Yes | Art. 9(2) not satisfied |
Certifier name and contact information | No | Certifier provides | Independent person identified | Yes | Art. 9(2) not satisfied |
3.2 Proving Actual Payment
FINDING: Article 9(2) requires both documentation demonstrating that embedded emissions were subject to a carbon price and separate evidence of actual payment — these are two distinct evidential requirements, and their combined absence creates audit exposure that persists through 31 December 2031 under the Article 9(3) retention obligation.
SO WHAT: A carbon-price assessment or tax liability statement issued by the supplier may demonstrate that a carbon price applies to the installation, but it does not by itself constitute evidence that the price was actually paid — this distinction is the central audit-defence risk for Article 9 claims.
NOW WHAT: Require payment confirmation evidence that is distinct from the carbon liability assessment, and verify that it connects to the relevant installation and production period before approving any deduction file, with collection completed before year-end 2026.
The evidence of actual payment must connect three elements: the payment made by the installation, the period to which it relates, and the production route that generated the embedded emissions in the declared CBAM goods. A payment receipt alone does not establish that connection unless it references the specific installation, period, and production volume. Compliance Managers should require suppliers to provide payment confirmation identifying: the carbon-pricing authority, the period covered, the installation or entity making the payment, and the tonnage or equivalent unit on which the payment was calculated.
Note: The final implementing act on exact acceptable payment-document formats had not been adopted at the research cut-off. Procedures should be updated to align with the final act once published on the Commission DG TAXUD CBAM legislation page.
3.3 Rebates, Free Allocation and Compensation
FINDING: Article 9(1) requires that rebates or other compensation reducing the carbon price paid in a third country must be taken into account when calculating the deductible amount — the deductible figure is the net effectively paid price, not the gross carbon-pricing liability.
SO WHAT: A supplier’s headline carbon tax rate or ETS price does not represent the deductible amount if the supplier also received free allocations, rebates, or subsidy compensation — using the gross price rather than the net effectively paid price would overstate the deduction and create a compliance error.
NOW WHAT: Add a mandatory rebate and compensation declaration to the supplier evidence pack and require explicit written confirmation that no offsetting mechanism has reduced the net carbon cost — collected before year-end 2026.
Free allocation within a third-country ETS is the most common form of compensation. Where a supplier received free allowances covering a proportion of its emissions, the carbon price was not effectively paid on that proportion. The deductible amount under Article 9(1) is the net amount after accounting for all such allocations and rebates. Where a third-country government provides subsidies or other compensation that offsets the carbon-pricing cost, those must be deducted from the claimed price. Compliance teams that rely on supplier-reported headline carbon prices without a rebate disclosure process will systematically overstate Article 9 deductions.
3.4 Emissions Linkage: From Installation to Shipment
FINDING: Article 9’s documentation requirements specify that embedded emissions must have been subject to the carbon price — establishing the linkage from the installation where carbon was priced, through the production route, to the specific goods imported, is the central unresolved evidence-chain problem in current Article 9 compliance practice. (For a detailed explanation of how embedded carbon is defined and calculated under the UK and EU regimes, see What Is Embedded Carbon Under UK CBAM)
SO WHAT: Payment evidence that cannot be connected to the specific embedded emissions declared for the imported goods creates a gap in the evidence chain that cannot survive audit scrutiny, regardless of how well-documented the payment itself is.
NOW WHAT: Map the evidence chain from installation → production route → embedded-emissions calculation → shipment → CBAM declaration before any deduction claim is submitted, with the mapping completed before year-end 2026 for 2026 transactions.
The emissions linkage problem is particularly acute in multi-step supply chains where the carbon-priced installation is not the direct exporter. For a steel importer, the carbon price may have been paid at the steelmaking stage, but the CBAM goods imported are finished products. The documentation must establish that the embedded emissions declared for those goods can be traced to production at the carbon-priced installation. HBIS Group’s approach — completing carbon-footprint accounting and supplying an Environmental Product Declaration to its European customer for a hydrogen-metallurgy steel export order with shipment scheduled for August 2025 — illustrates the type of production-to-shipment emissions documentation that anchors the emissions linkage at the supplier stage.
3.5 Independent Certification
FINDING: Article 9(2) requires that all documentation supporting the deduction is certified by an independent person, whose name and contact information must appear in the documentation — and the Commission’s draft implementing act of 13 May 2026 indicated that certifiers must be accredited for the relevant scope and comply with EN ISO/IEC 17029:2019 requirements.
SO WHAT: Certification is a hard dependency in the Article 9 evidence chain — the deduction cannot be claimed without it, and a certifier who does not meet the final eligibility criteria creates the risk that the certification is rejected and the deduction is disallowed.
NOW WHAT: Identify and pre-qualify potential independent certifiers well in advance of the 30 September 2027 declaration, confirming final eligibility criteria only after the implementing act is adopted before entering into certification contracts.
The EN ISO/IEC 17029:2019 reference in the draft act points to the international standard for conformity assessment — specifically validation and verification bodies. This is directionally consistent with the accreditation requirements already applying to EU CBAM embedded-emissions verifiers under the definitive regime. HBIS Group’s use of TÜV SÜD conformity-assessment reports for EU CBAM compliance in the steel sector illustrates that accredited third-party verification for CBAM-related carbon claims already operates in practice. The final independence tests, jurisdictional rules, and accreditation body requirements remain subject to the implementing act and should not be assumed to match the draft criteria.
3.6 Currency Conversion
FINDING: Article 9(5) empowers the Commission to establish implementing rules for the conversion of a foreign-currency carbon price into the corresponding reduction in CBAM certificates, including the applicable exchange-rate methodology — this methodology had not been adopted in final form at the research cut-off.
SO WHAT: Using an incorrect or self-selected exchange-rate methodology could change the calculated deduction, creating a systematic compliance error across every import transaction involving a non-euro carbon price.
NOW WHAT: Do not lock currency-conversion calculations to the draft methodology — apply provisional figures for planning purposes only and update to the final implementing-act methodology before the 30 September 2027 declaration.
Under the UK’s draft Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026, carbon price relief denominated in a foreign currency uses the applicable HMRC exchange rate for the calendar quarter preceding the tax point, rounded down to two decimal places — the type of quarterly exchange-rate methodology likely to characterise the EU’s final implementing act. The EU equivalent remained in draft at the research cut-off; Compliance Managers should not apply any self-selected rate pending the adopted implementing-act methodology.
3.7 Record Retention
FINDING: Article 9(3) of Regulation (EU) 2023/956 requires supporting records to be retained until the end of the fourth year after the year in which the CBAM declaration was or should have been submitted — meaning 2026 evidence supporting the 2027 declaration must be retained until the end of 31 December 2031.
SO WHAT: The evidence chain built during 2026 remains subject to audit scrutiny for five years after the 2027 filing, making document management and supplier accessibility a long-term compliance obligation, not a one-time exercise.
NOW WHAT: Create a document retention schedule covering all Article 9 evidence types, tagged to 31 December 2031 as the minimum retention date for 2026 transaction evidence.
The four-year EU retention period contrasts with the UK CBAM’s six-year general records obligation under HMRC guidance published 16 July 2026. Compliance teams maintaining both EU and UK CBAM records for shared suppliers should default to six years for all shared documentation to satisfy both regimes.
Table 5 — Evidence Retention Schedule: 2026 Import Transactions
Evidence type | Creation period | Declaration year | Retention deadline | Owner |
Carbon-pricing scheme documentation | 2026 | 2027 | 31 Dec 2031 | Declarant |
Evidence of actual payment | 2026 | 2027 | 31 Dec 2031 | Declarant |
Rebate/compensation declaration | 2026 | 2027 | 31 Dec 2031 | Declarant |
Emissions linkage documentation | 2026 | 2027 | 31 Dec 2031 | Declarant |
Independent certification | 2026–2027 | 2027 | 31 Dec 2031 | Declarant |
Currency conversion workings | 2026–2027 | 2027 | 31 Dec 2031 | Declarant |
4. Key Dates and Deadlines
4.1 EU Timeline
FINDING: The EU definitive CBAM regime began on 1 January 2026, meaning all in-scope goods imported from that date generate a certificate liability, and the first annual declaration covering 2026 imports with corresponding certificate surrender is due 30 September 2027.
SO WHAT: Every import transaction from 1 January 2026 is a potential Article 9 deduction transaction — but the evidence supporting any deduction must be built during 2026, not reconstructed from the 2027 declaration window.
NOW WHAT: Complete supplier evidence collection and independent certification for all 2026 import transactions before year-end 2026 to avoid retrospective evidence risk at the 30 September 2027 declaration.
Key EU regulatory milestones bearing directly on Article 9 deduction claims:
1 January 2026: Definitive CBAM regime in operation. All in-scope imports generate certificate liability.
13 May 2026: Commission published draft implementing act on third-country carbon prices.
10 June 2026: Consultation on the implementing act closed.
6 July 2026: Q2 2026 CBAM certificate price (€75.28/tCO₂) published.
10 August 2026: Corrected default values published (Commission Implementing Regulation (EU) 2026/1740).
14 August 2026: Sector-specific guidance published for all six CBAM sectors.
5 October 2026: Q3 2026 certificate price scheduled for publication.
4.2 EU Certificate Purchasing and Surrender
FINDING: CBAM certificates for 2026 import emissions become available for purchase from February 2027, with the certificate surrender deadline of 30 September 2027 — meaning Article 9 deduction validation and certificate procurement converge in early 2027.
SO WHAT: An Article 9 deduction that has not been validated and certified before the certificate purchase window opens creates a risk that insufficient certificates are procured initially, then corrected under time pressure before the surrender deadline.
NOW WHAT: Reconcile and validate all Article 9 carbon-price deductions before February 2027 to inform the certificate purchasing strategy, not as a post-purchase adjustment.
4.3 UK Comparator Timeline
FINDING: UK CBAM commences on 1 January 2027, the first UK CBAM accounting period ends 31 December 2027, and the first return and payment are due in May 2028 — running approximately 8 months behind the EU’s first declaration deadline of 30 September 2027.
SO WHAT: A business managing both EU and UK CBAM compliance cannot assume the same evidence collected for 2026 EU purposes will satisfy UK Carbon Price Relief requirements for 2027 UK imports — the regimes have different timelines, different evidence forms, and different record-retention periods.
NOW WHAT: Maintain separate EU and UK compliance calendars and confirm which elements of the Article 9 evidence chain can be adapted for UK Carbon Price Relief before 1 January 2027.
Table 6 — EU vs UK Carbon-Price Relief: Timeline Comparison
Milestone | EU CBAM | UK CBAM |
Regime start | 1 Jan 2026 | 1 Jan 2027 |
First filing period covers | 2026 imports | 2027 imports |
Certificate / rate purchase window | Feb 2027 | N/A (tax, not certificates) |
First declaration / return deadline | 30 Sep 2027 | 31 May 2028 |
Record retention | 4 years post-declaration | 6 years from creation / period end |
Evidence form | Art. 9(2) documentation + certification | Carbon Pricing Verification Form |
Carbon price mechanism | Reduction in certificates (Art. 9) | Carbon Price Relief (tax, s.150 Finance Act 2026) |
Threshold | 50 tonnes mass (goods) | £50,000 goods value (registration) |
Electricity in scope? | Yes | No |
5. Financial Exposure and Risk
5.1 Current EU Certificate Price
FINDING: The Commission’s official EU CBAM certificate prices for 2026 are €75.36/tCO₂ for Q1 and €75.28/tCO₂ for Q2, with Q3 2026 prices scheduled for publication on 5 October 2026.
SO WHAT: At €75.28/tCO₂, a successfully claimed Article 9 deduction for a tonne of embedded carbon eliminates approximately €75 of certificate cost — the financial value of the evidence chain is directly proportional to both the embedded-emissions volume and the prevailing certificate price.
NOW WHAT: Use the applicable quarterly price when modelling the financial value of potential Article 9 deductions for each supplier relationship, and update the model when Q3 and Q4 2026 prices are published before finalising the certificate purchasing strategy in February 2027.
Table 7 — 2026 CBAM Certificate Price Tracker
Quarter | Certificate price | Publication date | Application |
Q1 2026 | €75.36/tCO₂ | Q1 2026 | 2026 declaration |
Q2 2026 | €75.28/tCO₂ | 6 Jul 2026 | 2026 declaration |
Q3 2026 | Not yet published | 5 Oct 2026 (scheduled) | 2026 declaration |
Q4 2026 | Not yet published | TBC | 2026 declaration |
Illustrative calculation — for planning purposes only, based on Q2 2026 certificate price of €75.28/tCO₂: At that price, each tonne of embedded CO₂e for which a qualifying Article 9 deduction cannot be evidenced costs approximately €75 in certificate obligation. (For an explanation of how the EU certificate price is derived from the EU ETS and how the UK equivalent carbon pricing mechanism works, see UK CBAM & UK ETS Explained). Where a qualifying third-country carbon price of, for example, €30/tCO₂ was effectively paid on those embedded emissions, the certificate requirement reduces proportionally. Importers must use verified product-specific default values from Commission Implementing Regulation (EU) 2025/2621 (as corrected by (EU) 2026/1740) for any emissions-based calculation — not a generic sector average. Verify against actual embedded emissions data and current certificate prices before filing.
5.2 EU Penalty Exposure
FINDING: Under Article 26 of Regulation (EU) 2023/956, failure to surrender the required number of certificates by 30 September attracts the EU ETS excess-emissions penalty under Directive 2003/87/EC — with Article 16(3)–16(4) of that Directive establishing a statutory base rate of €100/tCO₂, indexed to European consumer prices.
SO WHAT: An Article 9 deduction that is later disallowed — because the evidence chain cannot be substantiated — converts the face-value certificate saving into a penalty exposure on the uncovered tonnes at the applicable EU ETS rate, which may exceed the original certificate cost.
NOW WHAT: Treat any unsupported Article 9 deduction as a financial-control issue requiring the same standard of evidence as the underlying certificate obligation — all deductions must be fully evidenced before the 30 September 2027 surrender deadline.
Note on penalty figure: The verified statutory penalty base rate under Directive 2003/87/EC is €100/tCO₂. An authoritative, inflation-adjusted 2026 CBAM penalty figure was not confirmed in the research data and is not stated here. Compliance Managers should verify the current adjusted rate directly from the EU ETS authority before financial modelling.
5.3 Cost of Claiming the Deduction
FINDING: EU CBAM implementation analysis indicates that evidence collection, independent certification, and internal compliance costs can potentially exceed the financial value of a low third-country carbon-price deduction at the Q2 2026 certificate price of €75.28/tCO₂ — making a cost-benefit test essential before committing to the full Article 9 process.
SO WHAT: Not every theoretically eligible Article 9 deduction is commercially worth pursuing — the direct evidence-chain cost (supplier data collection, independent certification, internal compliance resource) must be weighed against the certificate saving at the applicable quarterly price.
NOW WHAT: Apply a claim/no-claim cost-benefit assessment to each supplier relationship before committing to the Article 9 evidence chain — completing the assessment before February 2027 when certificate purchasing begins.
CBAM Deduction ROI Framework (illustrative):
● Potential certificate saving:
(eligible embedded emissions in tCO₂) × (effective third-country carbon price per tCO₂) ÷ (EU CBAM certificate price) × (EU certificate price).
This provides the gross certificate reduction value.
● Evidence-chain cost:
Supplier data collection + independent certification fee + internal compliance resource + legal review if required for eligibility assessment.
● Decision threshold:
Proceed with claim where the certificate saving exceeds the evidence-chain cost by a material margin.
5.4 UK Carbon Price Relief — Comparison
FINDING: Under Finance Act 2026, section 150, HMRC requires a Carbon Pricing Verification Form completed by an independent verifier meeting required standards for each UK CBAM Carbon Price Relief claim — with CBAM records generally retained for six years from creation or end of the relevant accounting period.
SO WHAT: The UK’s Carbon Price Relief mechanism was more operationally defined at the research cut-off than the EU’s Article 9 implementing framework — HMRC published detailed guidance on 16 July 2026 while the EU’s equivalent implementing act remained in consultation.
NOW WHAT: Do not assume EU Article 9 documentation automatically satisfies the UK Carbon Pricing Verification Form requirement — build separate UK Carbon Price Relief procedures applicable from 1 January 2027. (For a full guide to calculating UK CBAM liability and understanding how Carbon Price Relief interacts with the charge, see UK CBAM Liability Calculation Guide 2027.)
The UK qualifying carbon-pricing schemes potentially include carbon taxes, emissions trading schemes, and schemes placing a price on imported goods’ embodied emissions. The importer must establish that the embodied emissions were subject to a qualifying scheme and obtain the relevant verification form. While the general evidence logic mirrors Article 9, the specific form, the verification standard, and the calculation methodology under the UK’s draft Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026 are distinct from the EU requirements and require separate procedural treatment.
6. Sector-Specific Impact Analysis
6.1 Steel
FINDING: Tata Steel’s FY2025–26 Integrated Report records 23.48 Mt of India production and 22.53 Mt of India deliveries — but no authoritative source identified EU-bound export volume or a verified Article 9 deduction amount for any Indian steel producer.
SO WHAT: Company scale confirms that the evidence-chain question for Indian steel exporters is commercially significant, but CBAM liability and Article 9 deduction amounts cannot be responsibly calculated without shipment-specific embedded-emissions data and confirmed third-country carbon-price payment records.
NOW WHAT: Steel importers sourcing from India must obtain product- and installation-specific emissions data and carbon-price payment evidence from each supplying facility before year-end 2026.
The steel sector’s Article 9 challenge is the emissions linkage problem at scale. Steel production spans multiple production routes — blast furnace/basic oxygen furnace, electric arc furnace, and hydrogen-metallurgy routes — each with different embedded-emissions profiles. HBIS Group announced a 10,000-tonne hydrogen-metallurgy green-steel export order to an Italian customer with shipment scheduled for August 2025, completing carbon-footprint accounting and supplying an Environmental Product Declaration to the European customer. This illustrates that emissions documentation for Article 9 begins at the production stage, not at the customs declaration. Beijing Shougang’s 2025 annual report states that China’s steel industry entered the national carbon market in 2025, meaning eligible carbon costs may be present in Chinese-origin steel — but the eligibility assessment and evidence chain remain the importer’s obligation.
6.2 Aluminium
FINDING: No single sector-wide authoritative embedded-carbon intensity figure for aluminium was confirmed in the research data — the Commission’s methodology is product-, CN-code-, and production-route-specific, meaning primary aluminium from a hydropower-intensive smelter has materially different embedded emissions than aluminium produced from a coal-intensive grid.
SO WHAT: A generic Article 9 deduction calculation for aluminium is not possible without installation-specific embedded-emissions data — and the deductible carbon price must relate to those specific emissions, not to a sector-average estimate.
NOW WHAT: Calculate Article 9 eligibility and deduction value only at the product/CN-code/installation level, using verified embedded-emissions data from the specific supplying facility, with evidence collated before year-end 2026.
Under the EU CBAM sector methodology for aluminium, the Commission’s sector guidance published on 14 August 2026 addresses direct embedded emissions; indirect electricity emissions are outside the aluminium CBAM calculation scope under the current framework. The Article 9 deduction therefore applies to the direct embedded emissions for which a third-country carbon price was effectively paid, not to the electricity cost embedded in the production process. Confirm the applicable emissions scope against the Commission’s aluminium sector guide before building the evidence chain.
6.3 Cement
FINDING: The Commission’s analysis found actual emissions for cement CN code 2523 90 00 ranging from 0.16 to 1.27 tCO₂/t, compared with the transitional default value of 1.35 tCO₂/t — a variation within a single CN code of approximately eight times.
SO WHAT: For cement importers, the quality of embedded-emissions evidence directly determines both the certificate liability and the scale of any Article 9 deduction — at Q2 2026 prices of €75.28/tCO₂, the difference between 0.16 tCO₂/t and 1.27 tCO₂/t represents approximately €83.56 per tonne of goods in certificate cost difference.
NOW WHAT: Require product-specific embedded-emissions certification from cement suppliers, not a sector or country average, and assess whether the associated third-country carbon price was effectively paid on those specific emissions before year-end 2026.
Illustrative calculation — for planning purposes only, based on Q2 2026 certificate price of €75.28/tCO₂: The difference between the lower-end actual emission (0.16 tCO₂/t) and the upper-end actual emission (1.27 tCO₂/t) represents approximately €83.56/tonne of goods in certificate cost difference. Verify against actual product-specific emissions data before filing.
6.4 Fertilisers
FINDING: No single authoritative sector-wide embedded-carbon intensity figure for fertilisers was confirmed in the research data — the Commission’s methodology is product- and production-route-specific.
SO WHAT: For fertiliser importers, Article 9 deduction analysis is product-level work — a nitrogen-based fertiliser produced via steam methane reforming has substantially different embedded emissions from one produced via green hydrogen routes.
NOW WHAT: Map each fertiliser product by CN code, production route, and supplying facility before initiating Article 9 evidence collection — completing this mapping before year-end 2026.
6.5 Hydrogen
FINDING: No single authoritative sector-wide embedded-carbon intensity figure for hydrogen was confirmed in the research data — emissions are entirely dependent on the production method (green, blue, grey) and the specific installation.
SO WHAT: An Article 9 deduction for hydrogen is only defensible where the deduction is tied to the specific production-route emissions at the relevant installation — a country-level carbon price cannot be applied to a hydrogen product without installation-specific evidence.
NOW WHAT: Obtain installation-specific embedded-emissions data and carbon-price payment records for each hydrogen supply contract before year-end 2026.
6.6 Electricity
FINDING: EU CBAM applies to electricity, but embedded emissions are expressed per MWh rather than per tonne of product, and the calculation methodology is country- and grid-specific rather than installation-specific.
SO WHAT: The standard per-tonne Article 9 deduction framework cannot be applied to electricity without adaptation — the embedded-emissions unit is different and the applicable carbon-price evidence must relate to grid-level or generation-level emissions.
NOW WHAT: Maintain a separate electricity-sector compliance methodology and confirm the applicable Article 9 evidence approach for electricity before 30 September 2027.
6.7 UK Sector Scope Comparison
FINDING: The UK CBAM initial scope covers five sectors — aluminium, cement, fertiliser, hydrogen, and iron and steel — while electricity is explicitly outside the initial UK CBAM scope, and glass and ceramics (included in earlier proposals) were removed from the 2027 scope.
SO WHAT: An EU CBAM Article 9 evidence framework built for all six EU sectors cannot be directly copied into UK Carbon Price Relief compliance — the UK scope is narrower, the evidence form is different, and the UK’s indirect-emissions inclusion is delayed until 2029 at earliest.
NOW WHAT: Maintain clearly separated EU and UK sector coverage lists and confirm UK scope applicability for every product category before 1 January 2027.
Table 8 — EU vs UK Sector Scope and Evidence Comparison
Sector | EU CBAM | UK CBAM | Article 9 / CPR relevance |
Iron & steel | Yes | Yes | High: complex multi-route emissions linkage |
Aluminium | Yes (direct emissions; see sector guide) | Yes | High: production-route specific |
Cement | Yes | Yes | High: wide emissions-intensity range within CN codes |
Fertilisers | Yes | Yes | High: production-route specific |
Hydrogen | Yes | Yes | High: production-method specific |
Electricity | Yes | No (initial scope) | EU only: separate per-MWh methodology |
7. Practical Action Framework
7.1 Step 1 — Identify Potentially Deductible Carbon Prices
FINDING: Article 9(1) of Regulation (EU) 2023/956 requires the carbon price to have been effectively paid in a third country — making supplier-level carbon-pricing identification the first mandatory step, and the prerequisite for every subsequent stage of the nine-stage evidence chain.
SO WHAT: Country-level carbon-pricing policy is only the starting point — eligibility depends on installation-level coverage and actual payment, not on whether a carbon market or tax exists in the exporting jurisdiction.
NOW WHAT: Map every relevant supplier’s carbon-pricing mechanism — country, scheme type, installation coverage, and payment history — before year-end 2026, while 2026 transactions are current and supplier contacts are accessible.
Carbon Price Eligibility Checklist:
1. Identify the country where the exporting installation is located.
2. Confirm whether a qualifying carbon-pricing mechanism applies in that country (carbon tax, ETS, or equivalent scheme).
3. Confirm whether the specific installation falls within that mechanism’s coverage.
4. Obtain a statement from the supplier confirming whether the carbon price was effectively paid during the relevant period.
5. Obtain disclosure of any rebates, free allocations, or compensation reducing the carbon price.
6. Assess net eligibility: is the effective carbon price positive after accounting for all reductions?
7.2 Step 2 — Issue the Supplier Evidence Request
FINDING: Article 9(2) requires documentation demonstrating that embedded emissions were subject to a carbon price effectively paid, evidence of rebates or compensation, references to relevant third-country legislation, the name and contact of the independent certifier, and evidence of actual payment.
SO WHAT: All required documentation originates upstream at the supplier and installation level — a Compliance Manager cannot construct the Article 9 evidence chain from publicly available sources alone.
NOW WHAT: Issue a standardised evidence request to every relevant supplier during 2026, before the transactions requiring documentation pass from operational memory and accessible records, with collection completed before year-end 2026.
Supplier Evidence Request — Core Components:
Legal basis: Article 9(2), Regulation (EU) 2023/956.
Documentation of the applicable carbon-pricing scheme and the installation’s coverage under it.
Carbon-price assessment for the relevant period.
Declaration of rebates, free allocations, or compensation received.
Evidence of actual payment of the carbon price.
Identification of the proposed independent certifier.
Confirmation of emissions linkage from the installation to the specific goods to be imported.
7.3 Step 3 — Validate Payment and Emissions Linkage
FINDING: Article 9 requires both effective payment evidence and a demonstrable connection between that payment and the embedded emissions in the imported goods — two distinct evidential requirements that must be satisfied simultaneously, with the combined evidence auditable through 31 December 2031.
SO WHAT: A supplier providing payment confirmation without an emissions linkage, or an emissions assessment without payment confirmation, leaves a gap in the chain that cannot survive audit scrutiny.
NOW WHAT: Reconcile payment → installation → embedded emissions → shipment for every intended Article 9 deduction transaction before year-end 2026.
Table 9 — Evidence Reconciliation Matrix
Step | Evidence required | Provided by | Verified by |
Carbon liability arises | Scheme coverage + carbon price assessment | Supplier | Independent certifier |
Carbon price paid | Payment record | Supplier | Independent certifier |
Payment relates to installation | Installation identifier on payment record | Supplier | Independent certifier |
Emissions linked to production | Production records / EPD | Supplier | Independent certifier |
Production linked to shipment | Shipment records / CN code | Supplier / Declarant | Declarant |
Deduction entered in declaration | CBAM declaration entry | Declarant | Declarant (audit) |
7.4 Step 4 — Validate Rebates and Compensation
FINDING: Article 9(1) mandates that rebates or other compensation reducing the carbon price must be taken into account — the deductible amount is the net effectively paid price, not the gross statutory obligation, and any overstatement creates a compliance error that persists through the 30 September 2027 filing.
SO WHAT: A supplier reporting the headline carbon tax rate or ETS price without disclosing free-allocation volumes or rebate amounts will systematically overstate the deductible carbon price.
NOW WHAT: Require an explicit written supplier declaration confirming whether any rebate, free allocation, or other compensation was received during the relevant period and confirming the net effective carbon price after all deductions — obtained before year-end 2026.
7.5 Step 5 — Obtain Independent Certification
FINDING: Article 9(2) requires all documentation to be certified by an independent person, with name and contact information appearing in the documentation — and the Commission’s draft implementing act of 13 May 2026 indicated certifiers must comply with EN ISO/IEC 17029:2019 requirements.
SO WHAT: Certification is a hard dependency: without it, the Article 9 evidence pack is incomplete and the deduction cannot be claimed, regardless of the quality of the underlying documentation.
NOW WHAT: Identify and pre-qualify potential independent certifiers well before the 30 September 2027 declaration, then confirm final eligibility criteria once the implementing act is adopted before contracting for certification.
The draft implementing act’s reference to EN ISO/IEC 17029:2019 points to internationally recognised conformity assessment standards for validation and verification bodies. TÜV SÜD’s conformity-assessment work for HBIS Group on EU CBAM compliance confirms that internationally accredited certification bodies are already active in the CBAM supply chain for steel exports. The final certifier requirements under the Article 9 implementing act remain subject to adoption of the final text.
7.6 Step 6 — Calculate the Deduction
FINDING: Article 9(5) empowers the Commission to establish the conversion methodology from the third-country carbon price into a corresponding reduction in CBAM certificates, including currency conversion into euros — this methodology was in draft as of the research cut-off.
SO WHAT: Until the implementing act is adopted, any deduction calculation is provisional — using an incorrect methodology could understate or overstate the certificate reduction and create a filing error.
NOW WHAT: Apply a provisional calculation for planning purposes only and lock the final methodology to the adopted implementing act before submitting the 30 September 2027 declaration.
7.7 Step 7 — Perform the Claim/No-Claim Test
FINDING: EU CBAM implementation analysis indicates that the cost of obtaining the Article 9 evidence chain — supplier data, independent certification, internal compliance resource — can potentially exceed the financial value of a low third-country carbon-price deduction.
SO WHAT: Not all theoretically eligible deductions warrant the compliance investment, particularly where the third-country carbon price is low relative to the EU certificate price or where the embedded-emissions volume is small.
NOW WHAT: Apply the CBAM Deduction ROI Decision Matrix to each supplier relationship before committing to the full evidence chain — finalised before February 2027 when certificate purchasing begins.
Table 10 — CBAM Deduction ROI Decision Matrix
Factor | Assess | Direction |
Third-country carbon price (net, after rebates) | Higher → stronger case | ↑ Supports claim |
Embedded-emissions volume (tCO₂) | Higher → higher absolute saving | ↑ Supports claim |
EU certificate price (quarterly) | Higher → greater value per deduction | ↑ Supports claim |
Evidence-chain cost (certification + data + resource) | Lower → better ROI | ↓ Reduces threshold |
Net value (saving minus evidence-chain cost) | Material positive → proceed | Decision: Claim / No-claim |
8. Strategic Outlook — 2026–2027
8.1 What Changes Before the First Declaration?
FINDING: The Commission’s implementing act on third-country carbon prices — covering proof of payment, currency conversion, and certifier eligibility — was in public consultation until 10 June 2026, meaning material operational mechanics of Article 9 were still being finalised twelve months before the first declaration deadline of 30 September 2027.
SO WHAT: Internal evidence procedures built to the draft provisions face rework risk, and contracts with certifiers based on draft eligibility criteria may require revision once the final act is published.
NOW WHAT: Establish a quarterly regulatory-change review focused on the Commission DG TAXUD CBAM legislation page, with a trigger to update internal procedures within 30 days of any new implementing-act adoption — completed in sufficient time before the 30 September 2027 declaration.
The timeline between consultation close (10 June 2026) and the first declaration deadline (30 September 2027) is approximately 15 months. That is sufficient for the Commission to adopt the implementing act, for Compliance Managers to update procedures, and for certification to be completed — but not if monitoring protocols fail or procedure updates are deferred. The practical risk is that businesses treat the draft as final and build evidence procedures that become non-compliant on adoption of the final text.
8.2 The Shift from Reporting to Audit Defence
FINDING: The first EU CBAM declaration for 2026 imports is due 30 September 2027, and Article 9(3) requires supporting records to be retained until the end of 2031 — meaning the 2026 evidence chain remains auditable for five years after the filing deadline.
SO WHAT: The compliance task in 2026 is not just to build evidence for the filing; it is to build evidence that will withstand EU customs authority scrutiny through 2031 — documentation that is retrievable, linked, and certified must be archived with that audit horizon in mind.
NOW WHAT: Complete the full Article 9 evidence architecture — including certified documentation, emissions linkage records, rebate declarations, and currency conversion workings — before year-end 2026, and place it in a retained archive accessible through 31 December 2031.
The shift from the transitional reporting period (1 October 2023 – 31 December 2025) to the definitive regime (from 1 January 2026) marks a fundamental change in the nature of the compliance obligation. During the transitional period under Regulation (EU) 2023/956, CBAM obligations were limited to quarterly reporting; no certificate purchase or surrender was required. The definitive regime converts every missing certificate into a potential penalty exposure at the applicable EU ETS rate. Article 9 deduction evidence must be treated with the same rigour as the underlying certificate obligation.
8.3 EU vs UK: Two Carbon-Price Relief Systems
FINDING: The EU mechanism is a certificate reduction under Article 9 of Regulation (EU) 2023/956, with its implementing rules in draft at the research cut-off; the UK mechanism is a tax relief under Finance Act 2026, section 150, with detailed HMRC guidance published 16 July 2026 and operational from 1 January 2027.
SO WHAT: The two systems have different evidence forms, different calculation methodologies, different record-retention periods (four years EU, six years UK), and different timelines — a single unified evidence framework cannot satisfy both regimes.
NOW WHAT: Maintain separate EU and UK carbon-price relief compliance programmes, with distinct supplier evidence request templates and verification forms, operational from 1 January 2027 for the UK regime.
The UK’s position at the research cut-off — with published HMRC guidance, a defined Carbon Pricing Verification Form requirement, and draft secondary legislation specifying the calculation methodology — means UK Carbon Price Relief procedures can be built with greater certainty than the EU Article 9 operational details. Multinational compliance teams should begin UK Carbon Price Relief preparation in parallel with, not sequentially after, EU Article 9 work.
The most immediate action for the Compliance Manager is to begin Article 9 evidence collection for live 2026 import transactions — ensuring that when UK Carbon Price Relief documentation requirements become operational on 1 January 2027, supplier relationships are already oriented to providing carbon-price evidence as standard, with independent certification relationships identified and the nine-stage evidence chain operational. (For the full UK CBAM implementation framework covering registration, governance, and first return preparation, see UK CBAM Importer Compliance Readiness 2027.)
9. FAQ
9.1 How can an EU importer claim a deduction for a carbon price paid in a third country under CBAM Article 9?
Under Article 9(1) of Regulation (EU) 2023/956, an authorised CBAM declarant may reduce the number of certificates to be surrendered by the amount corresponding to the carbon price effectively paid in the third country on the declared embedded emissions, taking into account any rebates or compensation that reduced that price. The deduction requires a full evidence chain: documentation of the carbon price, evidence of actual payment, treatment of rebates, emissions linkage, and independent certification, all of which must be assembled during the year of import. For 2026 imports, the underlying evidence must be built before year-end 2026, with the declaration and certificate surrender due 30 September 2027. The legal basis is Article 9, Regulation (EU) 2023/956, consolidated version updated 20 October 2025.
9.2 What evidence is required to prove that a carbon price was actually paid in a third country for EU CBAM purposes?
Article 9(2) of Regulation (EU) 2023/956 requires documentation demonstrating that the embedded emissions were subject to a carbon price effectively paid, plus evidence of rebates or compensation, references to the relevant third-country legislation, and separate evidence of actual payment. All documentation must be certified by an independent person, whose name and contact information must appear in the documentation. The implementing rules on the precise form of payment evidence, currency conversion, and certifier eligibility were in draft as of the research cut-off (consultation closed 10 June 2026) and are subject to the Commission’s implementing act expected before the 30 September 2027 declaration deadline.
9.3 Does India’s Carbon Credit Trading Scheme qualify as a carbon price that can be deducted from EU CBAM liability?
The Article 9 eligibility determination requires confirmation that the specific mechanism constitutes a qualifying carbon-pricing scheme under Article 9 conditions, that the relevant installation is covered, that the carbon price was effectively paid, that rebates are accounted for, and that emissions linkage can be established — none of which can be answered in general without supplier-specific primary evidence. Tata Steel explicitly identifies EU CBAM as a regulatory and competitiveness risk for its European operations, but no authoritative source confirmed a specific Article 9 deduction claim for Indian-origin steel at the research cut-off. The legal basis for the eligibility assessment is Article 9(1), Regulation (EU) 2023/956.
9.4 Who can independently certify evidence of a third-country carbon price paid under EU CBAM, and what must the certification prove?
The certifier must be independent from the operator and must certify that the documentation demonstrates effective payment of the carbon price, the treatment of rebates, and the emissions linkage — with the certifier’s name and contact information appearing in the documentation under Article 9(2). The Commission’s draft implementing act of 13 May 2026 indicated that certifiers must be accredited for the relevant scope and comply with EN ISO/IEC 17029:2019 requirements, and must satisfy independence tests. The final certifier eligibility criteria are subject to adoption of the implementing act; the legal basis is Article 9(2) and 9(5), Regulation (EU) 2023/956.
9.5 What is the difference between the actual carbon-price deduction and the default carbon-price method under EU CBAM Article 9?
The actual-price route under Article 9(1) requires the full evidence chain — payment documentation, emissions linkage, rebate treatment, and independent certification — and the deduction reflects the specific carbon price effectively paid by the relevant installation. The default-price route, introduced by Article 9(4) as amended by Regulation (EU) 2025/2083, permits use of a Commission-published yearly default carbon price where the exporting country has qualifying carbon-pricing rules and a default price has been determined; Commission default prices were expected to become available from 2027 but had not been published at the research cut-off (24 August 2026). The legal basis is Article 9(1) and 9(4), Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083.
9.6 What documents should an EU CBAM declarant retain in 2026 to support a third-country carbon-price deduction in the 2027 declaration?
Under Article 9(3) of Regulation (EU) 2023/956, all supporting documentation must be retained until the end of the fourth year after the declaration year — for 2026 imports declared in 2027, the retention deadline is 31 December 2031. Documents to retain include: carbon-pricing scheme documentation and installation coverage confirmation; carbon-price assessment for the relevant period; rebate and compensation declaration; evidence of actual payment; emissions linkage documentation connecting payment to the imported goods; independent certification with the certifier’s name and contact; and currency conversion workings once the implementing methodology is adopted. The legal basis is Article 9(2) and 9(3), Regulation (EU) 2023/956.
Sources Used in This Report
European Union / EUR-Lex | Regulation (EU) 2023/956 establishing a carbon border adjustment mechanism | 10 May 2023; consolidated version updated 20 October 2025 | EUR-Lex | Binding law
European Union / EUR-Lex | Regulation (EU) 2025/2083 (amending Article 9(4)) | 8 October 2025 | EUR-Lex | Binding law
European Union / EUR-Lex | Commission Implementing Regulation (EU) 2025/2547 — emissions methodology | 10 December 2025 | EUR-Lex | Implementing regulation
European Union / EUR-Lex | Commission Implementing Regulation (EU) 2025/2621 — default values | 16 December 2025 | EUR-Lex | Implementing regulation
European Union / EUR-Lex | Commission Implementing Regulation (EU) 2026/1740 — corrected default values | 10 August 2026 | EUR-Lex | Implementing regulation
European Union / EUR-Lex | Directive 2003/87/EC, Article 16(3)–16(4) — EU ETS excess-emissions penalty | Consolidated | EUR-Lex | Binding law
European Commission / DG TAXUD | Carbon price paid in Third Countries (draft implementing act and consultation) | 13 May 2026 | EC TAXUD CBAM portal | Draft / Consultation
European Commission / DG TAXUD | Price of CBAM certificates (Q1 2026: €75.36/tCO₂; Q2 2026: €75.28/tCO₂; Q3 scheduled 5 Oct 2026) | 6 July 2026 | EC TAXUD CBAM portal | Government guidance
European Commission / DG TAXUD | CBAM — Actual vs Default Values guidance | 23 June 2026 | EC TAXUD CBAM portal | Government guidance
European Commission / DG TAXUD | CBAM Sector Guidance (cement, hydrogen, fertilisers, iron and steel, aluminium, electricity) | 14 August 2026 | EC TAXUD CBAM portal | Government guidance
European Commission | CBAM Questions and Answers | 14 July 2021; November 2023 | European Commission | Official Q&A
UK Parliament / legislation.gov.uk | Finance Act 2026, Part 5, Section 150 — Carbon Price Relief | 2026 | legislation.gov.uk | Binding law
UK Parliament / legislation.gov.uk | Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026 — draft | 2026 | legislation.gov.uk | Draft legislation
HMRC | Claiming Carbon Price Relief for CBAM | 16 July 2026 | gov.uk | Government guidance
HMRC | What you need to work out Carbon Price Relief | 16 July 2026 | gov.uk | Government guidance
HMRC | Keeping records for CBAM | 16 July 2026 | gov.uk | Government guidance
HMRC | CBAM Policy Summary | 10 February 2026; updated 16 July 2026 | gov.uk | Government guidance
Tata Steel | Integrated Report & Annual Accounts 2025–26 | FY2025–26 (published 2026) | Tata Steel | Company disclosure
Tata Steel | FY2026 Production and Delivery Volumes | 7 April 2026 | Tata Steel | Company disclosure
HBIS Group | 10,000-tonne hydrogen-metallurgy green steel export order announcement | 18 July 2025 | HBIS Group | Company disclosure
HBIS Group | CBAM conformity assessment / carbon management (TÜV SÜD) | 2024 | HBIS Group | Company disclosure
Beijing Shougang | 2025 Annual Report (acknowledging China national carbon market entry and EU CBAM) | 18 April 2026 | Beijing Shougang | Company disclosure
Eurostat / European Commission | EU–India Trade Factsheet | 2024 data | Eurostat | Trade data
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