CBAM from 2027: why the 50% quarterly holding covers less than half of the final certificate requirement
3 November 2026
From 2027, authorised CBAM declarants must hold CBAM certificates at the end of each quarter, covering 50% of the embedded emissions of the goods imported since the start of the year. The figure suggests that half of the annual requirement is covered by the end of each quarter. Where default values are used, the actual share is considerably lower. In a typical scenario, the quarterly holding covers only about 38% of the certificates that will finally have to be surrendered. The gap is not a calculation error. It follows from the way the two requirements are calculated, and it grows as the mark-up on default values rises. This article explains where the gap comes from, illustrates it with a worked example and sets out what it means for budgeting and certificate purchases.
CBAM from 2027: why the 50% quarterly holding covers less than half of the final certificate requirement
From 2027, authorised CBAM declarants must hold CBAM certificates at the end of each quarter, covering 50% of the embedded emissions of the goods imported since the start of the year. The figure suggests that half of the annual requirement is covered by the end of each quarter. Where default values are used, the actual share is considerably lower. In a typical scenario, the quarterly holding covers only about 38% of the certificates that will finally have to be surrendered.
The gap is not a calculation error. It follows from the way the two requirements are calculated, and it grows as the mark-up on default values rises. This article explains where the gap comes from, illustrates it with a worked example and sets out what it means for budgeting and certificate purchases.
Two certificate requirements on different bases
CBAM distinguishes between two requirements that apply side by side. The quarterly holding requirement ensures that importers build up certificates during the year. The annual requirement determines how many certificates are finally surrendered for the imports of a calendar year.
| Quarterly holding requirement | Final annual requirement | |
|---|---|---|
| Share | 50% of cumulative embedded emissions since 1 January | 100% of the embedded emissions of the year |
| Emissions basis (default values) | Default value without mark-up | Default value including mark-up |
| Free allocation | Deducted | Deducted |
| Deadline | End of each quarter | Surrender by 30 September of the following year |
For the initial 2027 calculation, the quarterly figure is based on default values without the mark-up, with the free-allocation adjustment taken into account. An alternative methodology based on previously surrendered certificates becomes relevant in later years. The final requirement is based on verified actual emissions where available. Where default values are used instead, the mark-up applies.
The mark-up is not fixed. For most goods it depends on the year of import, while the CBAM factor, which determines the share of the free allocation that is deducted, falls at the same time:
| Year of import | Mark-up on default values | CBAM factor |
|---|---|---|
| 2026 | 10% | 97.5% |
| 2027 | 20% | 95% |
| 2028 | 30% | 90% |
For imports in 2026, there is no quarterly holding requirement yet. The certificates for 2026 are purchased from February 2027. The gap described in this article therefore applies from 2027 onwards.
Worked example: 100 tonnes imported in 2027
The following example is deliberately hypothetical. It assumes an import of 100 tonnes of a CBAM good in the aluminium sector, released for free circulation on 1 February 2027. No verified actual emissions are available, so the calculation is based on default values. The values used are illustrative: a default value of 4.148 tCO2e per tonne and a benchmark of 1.506 tCO2e per tonne. The actual values depend on the CN code, the country of origin and the production route.
| Step | Calculation basis | Formula | Per tonne | 100 tonnes |
|---|---|---|---|---|
| 1 | Default value | – | 4.148 tCO2e | 414.80 tCO2e |
| 2 | Default value with 20% mark-up | 4.148 × 1.2 | 4.978 tCO2e | 497.76 tCO2e |
| 3 | Free allocation | Benchmark 1.506 × CBAM factor 95% | 1.431 tCO2e | 143.07 tCO2e |
| 4 | Quarterly holding basis | Step 1 − step 3 | 2.717 tCO2e | 271.73 tCO2e |
| 5 | Quarter-end requirement | Step 4 × 50% | – | 135.87 certificates |
| 6 | Final liability | Step 2 − step 3 | 3.547 tCO2e | 354.69 certificates |
| 7 | Still to be purchased | Step 6 − step 5 | – | 218.82 certificates |
By 31 March 2027, the importer must hold 135.87 certificates for this import. The estimated final liability, however, amounts to 354.69 certificates. The quarter-end holding therefore covers 135.87 ÷ 354.69 = about 38% of the final figure. The remaining 218.82 certificates must be purchased by 30 September 2028, when the certificates for 2027 are surrendered.
Per-tonne values are rounded to three decimal places and totals to two. Step 7 uses the rounded quarter-end requirement from step 5.
Why the gap arises – and why it grows
The gap has two causes. First, the quarterly calculation uses the default value without the mark-up, while the final calculation includes it. Second, the free allocation is deducted in full in both calculations. It therefore weighs more heavily against the smaller quarterly basis than against the larger final basis.
In the example, the mark-up adds 82.96 tCO2e to the final calculation. Because the free allocation of 143.07 tCO2e is deducted from both figures, this difference remains entirely in the final liability. Even without any free allocation, the quarterly holding could not reach 50% of the final liability on a default-value basis. With a 20% mark-up, the upper limit is 50% ÷ 1.2, or about 42%. The larger the free allocation relative to the default value, the further the share falls below that limit.
The gap is likely to widen in 2028, when the mark-up rises to 30% and the CBAM factor falls to 90%. If the quarterly calculation continues to use default values without the mark-up, the upper limit drops to 50% ÷ 1.3, or about 38%. With the same illustrative values as above, the quarterly holding would then cover only about 35% of the final liability. Whether the quarterly methodology changes for later years remains to be seen. The CBAM factors shown reflect the law in force. A Commission proposal from July 2026 (COM(2026) 616) would slow the free-allocation phase-out from 2028. It has not yet been adopted. Even if it were, the share in this example would stay at about 35%.
When the gap can reverse
The effect can also run the other way. Where an importer later obtains verified actual emissions from the installation, these replace the default values in the final calculation. If the actual emissions are materially lower than the default values, the final liability can fall below the quarterly holding. In that case, the importer holds more certificates than it needs for surrender. Surplus certificates can be repurchased only within the limits set by the CBAM Regulation, so over-purchasing also ties up cash.
What the gap means for budgeting and price exposure
An importer that plans its CBAM budget on the basis of the quarterly holding underestimates its actual cost. In the example, the difference is 218.82 certificates for a single import of 100 tonnes. At an assumed certificate price of €80, this corresponds to €17,506 that is not visible in the quarter-end figure.
Between the quarter-end deadline and the surrender date, importers decide how many certificates to buy and when. Two simple approaches illustrate the trade-off, both at €80 per certificate:
| Approach | Purchased on 1 February | Cost on 1 February | Still unpurchased | Price exposure remaining |
|---|---|---|---|---|
| Full estimated requirement at once | 354.69 certificates | €28,375 | 0 certificates | 0% |
| Quarter-end minimum first | 135.87 certificates | €10,870 | 218.82 certificates | about 62% |
Buying everything at once fixes the cost but ties up cash early. Buying only the minimum keeps cash available, but the open position moves with the certificate price. If the price rises by 10% to €88, the remaining certificates cost €19,256 instead of €17,506. If the price falls, the cost falls accordingly. Any split in between is equally possible, from a 50/50 split to progressive purchases over the year.
From 2027, the CBAM certificate price is published weekly and follows the auction prices of the EU Emissions Trading System. The open position should therefore be revalued every time the price changes. The price development in 2026 shows how much this can matter: the quarterly price rose from €75.28 in the second quarter to €82.32 in the third, an increase of 9.4%.
How Artem supports importers
The size of the gap is not a fixed figure. It differs by product, country of origin and production route, changes with the year of import and shifts once actual emissions data becomes available. With several product groups and suppliers, it becomes difficult to keep track of both figures in spreadsheets.
Artem calculates the quarterly requirement and the expected final liability from a small set of import data: CN code, country of origin, quantity, customs clearance date and customs declaration reference, plus actual emissions data where available. The applicable default values, mark-ups, benchmarks and CBAM factors are maintained in the platform and updated when the rules change. On this basis, Artem shows:
- the current quarter-end requirement and the estimated final liability
- certificates already held and certificates still to be purchased
- the current certificate price and, as soon as it can be calculated, the next price
- the resulting purchase cost and the remaining price exposure
Where actual emissions are used, the estimated final liability is based on current-year information and updated once verified data is available.
Artem does not make purchasing decisions. Each importer decides on the basis of its own budget, liquidity and risk appetite how much to buy and when. The platform provides the calculations, the regulatory logic and the price information on which that decision rests. More information is available at go.artem.earth.
Some important FAQs
Does the 50% quarterly requirement mean half of the annual certificates are covered?
No. The 50% refers to the quarterly holding basis, which is calculated without the mark-up on default values. With the 20% mark-up for 2027 imports, the quarterly holding can cover at most about 42% of the final liability, and less once the free allocation is deducted. In the worked example, it covers about 38%.
Does the gap apply to 2026 imports?
No. For 2026 imports there is no quarterly holding requirement. The certificates for 2026 are purchased from February 2027 and surrendered with the annual declaration.
Can the final liability be lower than the quarterly holding?
Yes. If verified actual emissions are used for the final calculation and are materially lower than the default values, the final liability can fall below the certificates held at quarter-end.
By when must the remaining certificates be purchased?
The certificates for imports in 2027 must be surrendered by 30 September 2028. Until then, importers can choose when to buy the remaining certificates, provided the holding requirement is met at each quarter-end.
How is the CBAM certificate price set?
In 2026, the price is a quarterly average of EU ETS auction prices. From 2027, the European Commission calculates and publishes a weekly price.
Summary
The quarterly holding requirement and the final annual requirement under CBAM are calculated on different bases. Where default values are used, the quarterly figure excludes the mark-up, while the final figure includes it. As a result, the nominal 50% holding covers well under half of the final liability: in the worked example about 38% for 2027 imports, and potentially less from 2028 as the mark-up rises. Importers that plan their budget on the quarterly figure underestimate their certificate costs, and every certificate not yet purchased remains exposed to the certificate price. A reliable view of both figures, updated with each import, each rule change and each price movement, is the basis for sound purchasing decisions.
Key facts
- From 2027, importers must hold certificates for 50% of cumulative embedded emissions at each quarter-end.
- On a default-value basis, the quarterly calculation excludes the mark-up; the final calculation includes it.
- The mark-up for most goods is 10% in 2026, 20% in 2027 and 30% from 2028.
- With a 20% mark-up, the quarterly holding can cover at most about 42% of the final liability; in the worked example it covers about 38%.
- If the methodology stays the same, the upper limit falls to about 38% in 2028.
- If verified actual emissions are lower than the default values, the final liability can fall below the quarterly holding.
- Certificates for 2027 imports must be surrendered by 30 September 2028.
- Artem shows the quarterly requirement, the estimated final liability, the open position and its cost at current prices.
All figures are illustrative and based on hypothetical default values and an assumed certificate price of €80. They do not constitute legal or tax advice.
Do you have questions about this topic?
Our EU compliance experts are happy to advise you.