CBAM Certificate Prices — How They're Calculated

CBAM certificate prices are linked to the EU ETS auction price. This article explains how the weekly price is set, how many certificates you need, and how to forecast your EU buyer's CBAM cost.

Published April 2026·Last updated April 2026·carbonborderadjustment.co.za

How CBAM Certificate Prices Work

CBAM certificate prices are not set by the market — they are set weekly by the European Commission, directly linked to the EU Emissions Trading System (EU ETS). This design ensures that the carbon price faced by EU importers mirrors the carbon price paid by EU producers, eliminating the competitive advantage that would otherwise accrue to producers in countries without carbon pricing.

The Weekly Price Mechanism

Each week, the European Commission calculates the average closing price of EU ETS allowances at the EU ETS auctions held in the previous week. This average becomes the CBAM certificate price for the following week. The price is published on the EU CBAM Registry and applies to all certificate purchases made during that week.

Practical implication: An EU importer who purchases CBAM certificates in a week when the EU ETS price is EUR 65/tCO₂ pays EUR 65 per certificate. If the ETS price rises to EUR 80/tCO₂ the following week, certificates purchased that week cost EUR 80 each.

Calculating the Number of Certificates Required

Certificates required = Quantity (tonnes) × Embedded carbon (tCO₂/tonne)

SA exporters who provide verified actual embedded carbon data give their EU buyers a direct cost advantage — fewer certificates to purchase.

The SA Carbon Tax Credit

The CBAM regulation provides that the certificate obligation is reduced by the carbon price already paid in the country of origin. At current rates, the SA carbon tax provides approximately a 15–20% reduction in certificate requirements.

Certificate Resale Rules

EU importers can resell unused certificates back to the European Commission, but only up to one-third of their total holdings.

For a complete CBAM compliance registration pathway, visit the Digital Product Passport Registry.

Frequently Asked Questions

How is the CBAM certificate price set?

CBAM certificate prices are set weekly by the European Commission based on the average closing price of EU ETS allowances at the EU ETS auctions in the previous week. This means CBAM certificate prices move in line with EU ETS prices. If the EU ETS price rises, CBAM certificate prices rise with it. The weekly price is published on the EU CBAM Registry and applies to all certificate purchases made in that week.

How many CBAM certificates does an EU importer need to buy?

An EU importer must purchase CBAM certificates equal to the total embedded carbon of their covered imports. The formula is: Certificates needed = Quantity imported (tonnes) × Embedded carbon (tCO₂/tonne). For example, an EU importer buying 1,000 tonnes of SA steel with an embedded carbon of 1.85 tCO₂/tonne needs 1,850 CBAM certificates. Each certificate represents one tonne of CO₂.

Can CBAM certificates be resold?

Yes. EU importers can resell unused CBAM certificates back to the European Commission. However, there is a limit: importers can only resell up to one-third of their total certificate holdings in any given year. Certificates cannot be traded between importers — they can only be purchased from and resold to the EU Commission. This prevents a secondary market and ensures the price remains tied to the EU ETS.

What happens if CBAM certificate prices rise sharply?

If EU ETS prices rise sharply, CBAM certificate costs rise with them. This increases the cost of importing SA goods into the EU and creates commercial pressure on SA exporters. SA exporters who have reduced their embedded carbon (through renewable energy, process improvements, or carbon offsets) are less exposed to ETS price rises because their buyers need fewer certificates. This is the core commercial incentive for SA exporters to reduce their carbon intensity.

How does the SA carbon tax credit reduce the number of certificates needed?

The CBAM regulation allows EU importers to deduct the carbon price already paid in the country of origin from their certificate obligation. For SA exporters, this means the SA carbon tax paid to SARS reduces the number of CBAM certificates their EU buyers must purchase. The credit is calculated as: (SA carbon tax paid in EUR) ÷ (EU ETS price per tCO₂). At current rates, the SA carbon tax provides approximately a 15–20% reduction in CBAM certificate requirements.

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