EU ETS Free Allowances Phase-Out: The CBAM Ramp-Up Schedule Explained
How the phase-out of free EU ETS allowances from 2026 to 2034 drives the CBAM cost ramp-up, and what African exporters need to plan for.
Why Free Allowances Matter for CBAM
The CBAM rate is tied to the proportion of EU ETS free allowances still received by EU domestic producers. As free allowances decrease, the CBAM rate increases — creating a predictable cost ramp-up schedule.
The Phase-Out Schedule
| Year | Free Allowances Remaining | Effective CBAM Rate | |---|---|---| | 2026 | 97.5% | 2.5% | | 2027 | 95% | 5% | | 2028 | 68% | 32% | | 2029 | 43% | 57% | | 2030 | 18% | 82% | | 2032 | 0% | 100% |
The 2028 Inflection Point
1 January 2028 is the critical date — the effective CBAM rate jumps from 5% to 32% in a single year. African exporters who have not completed their monitoring and verification infrastructure by this date will face a sudden 6× cost increase.
Planning Backwards from 2028
| Milestone | Target Date | |---|---| | Appoint CBAM compliance officer | Q1 2026 | | Complete facility-level GHG inventory | Q2 2026 | | Submit monitoring plan to EU | Q3 2026 | | First verified embedded emissions report | Q1 2027 | | First CBAM declaration | 31 May 2027 | | Ready for 2028 rate jump | 1 January 2028 |
Register at the Digital Product Passport Registry to build your compliance timeline before the 2028 inflection point.
Frequently Asked Questions
Complete all three compliance gates — Gate 1 KYC identity verification, Gate 2 CBAM financial authorisation, and Gate 3 Digital Product Passport registration — in one place at the DPP Registry.
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