CBAM mirrors the EU ETS free allocation given to domestic producers — but that credit is shrinking every year, and it's easy to misapply the schedule.
Last verified: 02 September 2026
EU ETS gives domestic (EU-based) producers in benchmark sectors a certain amount of free emissions allowances, to avoid disadvantaging them against non-EU competitors before CBAM existed. Now that CBAM exists, that same free-allocation benefit is being phased out on a fixed schedule — and CBAM importers get a matching credit against their certificate obligation for exactly the share still in effect.
| Year | Benchmark credit (decreasing) | Net obligation share (increasing) |
|---|---|---|
| 2026 | 97.5% | 2.5% |
| 2027 | 95% | 5% |
| 2028 | 90% | 10% |
| 2029 | 77.5% | 22.5% |
| 2030 | 51.5% | 48.5% |
| 2031 | 39% | 61% |
| 2032 | 26.5% | 73.5% |
| 2033 | 14% | 86% |
| 2034 | 0% | 100% |
The two columns always sum to 100% in any given year — they're the same schedule described from two directions, not two separate figures.
It's tempting to read "2.5% in 2026, rising to 100% by 2034" and apply it as a multiplier on your entire gross obligation — that's wrong, and it's a real bug we found and fixed in our own product in mid-2026.
The increasing figure only tells you what share of the free-allocation benefit has been withdrawn. It applies to the benchmark credit specifically — the portion of your obligation that a matching EU-ETS benchmark would otherwise have covered — not to emissions with no benchmark credit to begin with.
Net obligation = gross embedded emissions − (benchmark credit × the decreasing percentage for that year), then any further Article 9 deduction is applied on top. Getting the order and scope of this calculation wrong produces a materially different certificate cost, not a rounding difference.
No — this is the single most common misapplication of this schedule. The credit reduces only the benchmark-eligible portion of your gross embedded emissions, not the entire CBAM obligation. Applying it as an outer multiplier on everything overstates your relief in some years and understates it in others.