What the new draft act actually says
On 13 May 2026 the European Commission opened a public consultation on the implementing act that finally clarifies the rule every importer was waiting for: how to subtract, from a CBAM bill, the carbon price already paid in the country where the goods were produced. The consultation closes on 10 June 2026, and the deduction methodology will apply to the five CBAM sectors with a carbon price in scope: steel, cement, fertilisers, aluminium and hydrogen.
Until now the regulation said deductions were possible but did not specify which prices counted, how to convert them, or how to evidence them. The draft act closes that gap. It defines an explicit, EU-wide methodology so an importer in Germany or Spain claims the same credit for the same Chinese, Turkish or Indian tonne of steel.
Which carbon prices count, and which do not
The Commission distinguishes three types of payment that a third-country producer may have made:
- Explicit carbon prices: emissions trading schemes (the Chinese national ETS, the UK ETS, the California-Quebec link, RGGI) and carbon taxes (Singapore, South Africa, Canada’s federal benchmark). These are fully deductible at the rate effectively paid per tonne of CO2e covered by the installation.
- Implicit carbon prices: energy taxes, fuel excises or environmental fees that are not designed as a carbon instrument. These do not qualify, even if they raise the marginal cost of emitting.
- International credits under Article 6 of the Paris Agreement: ITMOs and equivalent units bought to offset the producer’s emissions. These are deductible, but capped at 10% of the CBAM liability for the goods concerned. The cap is the politically sensitive number in the whole file. It prevents importers from neutralising the CBAM bill with cheap offsets and protects the integrity of the EU ETS reference price.
Any rebate, refund or free allocation the producer received in their domestic scheme must be subtracted from the price claimed. The deduction is the net carbon cost actually borne, not the headline rate.
What importers will need to prove
The draft act builds on the verification logic that EU operators already know from the ETS. Each claim must be supported by:
- An attestation from the producer identifying the installation, the scheme, the period and the price per tonne.
- Independent verification by an accredited body (the same accreditation chain the Commission accepts for embedded emissions reports).
- A currency conversion using the European Central Bank rate on the date the carbon liability was settled.
- A reconciliation between the tonnes of CO2e on which the price was paid and the embedded emissions declared in the CBAM report. You can only deduct on the share of emissions that was actually priced.
For sectors with complex precursors (steel from imported pig iron, aluminium from third-country alumina) the deduction is calculated tier by tier. This is the same logic Dcycle applies when companies trace Scope 3 upstream emissions: the carbon cost has to follow the embedded emissions, not the customs value.
The 10% Article 6 cap, in practice
A worked example clarifies why the cap matters. A Spanish importer brings in 10,000 tonnes of fertiliser from a country with no domestic ETS. The producer presents Article 6 credits covering 6,000 tonnes at 8 EUR/tCO2e. Without the cap, the importer could deduct 48,000 EUR from a CBAM bill that, at an EU ETS reference of 75 EUR/tCO2e on the priced share, might be 450,000 EUR. With the cap, the deductible amount is limited to 10% of the CBAM liability for those goods. The result: the offset claim drops to 45,000 EUR, regardless of how many credits the producer holds.
Companies that were modelling their 2027 cost exposure assuming uncapped Article 6 use will need to redo the numbers. Dcycle customers in the affected sectors should treat the 10% line as the planning ceiling.
What to do before 10 June
The consultation window is short. Three actions are worth taking now:
- Map your suppliers’ exposure. For each CBAM good you import, identify whether the producer operates under an explicit carbon price, under Article 6 mechanisms, or under neither. The deductible amount depends entirely on the answer.
- Open the documentation conversation. Suppliers in jurisdictions with ETS schemes are not used to issuing carbon-cost attestations to EU buyers. The earlier you ask, the cleaner your first quarterly declaration in 2027.
- Submit feedback if the methodology hurts your sector. The Commission is open to comments on the verification burden, the treatment of free allocation in third-country ETSs, and the calibration of the 10% cap. A platform like Dcycle’s automated data collection helps quantify the operational cost of the verification chain in your specific supply chain, which is useful evidence to attach to a consultation response.
The deduction rule is technical but it is, for many importers, the difference between CBAM being a manageable cost and a margin-destroying one. See our CBAM resource hub for the wider compliance picture, or request a demo to see how Dcycle tracks embedded emissions and carbon-price evidence in a single audit-ready record.
Source: European Commission, Directorate-General for Taxation and Customs Union, public consultation on the implementing act on carbon price paid in third countries, opened 13 May 2026, deadline 10 June 2026.