FAQ.- How does the CBAM align with other Emissions Trading Systems (ETS) outside the EU?

CBAM ensures imported goods receive equitable treatment compared to EU products through specific design aspects:

– Embedded emissions are calculated based on actual values, rewarding companies with lower CBAM payments for decarbonisation efforts.

– CBAM certificate prices match those for EU producers under the EU Emissions Trading System (EU ETS), fostering fairness.

– Deductions are made for carbon prices paid abroad, preventing double pricing.

For instance, if a third country has its emissions trading system, the carbon price paid there will be considered. The Commission will introduce secondary legislation to incorporate rules for accounting for foreign carbon prices before the transitional period ends. During this phase, reporting declarants must disclose the carbon price payable in the country of origin for embedded emissions in imported goods, considering any rebates or compensations.