The European Commission is expected to publish its review of the European Union Emissions Trading System (EU ETS) on 17 July 2026. CBAM is mechanically connected to the EU ETS through certificate prices, free allocation, benchmarks, default values and product scope. So, softer ETS can reduce CBAM cash exposure, and tighter ETS can move the import cost in the other direction.

By 30 September 2027, importers of CBAM goods must submit their first CBAM declaration and surrender the corresponding certificates. For importers, the ETS review can affect CBAM through five calculation and coverage channels: the EUA price used for certificates, free-allocation adjustment, ETS/CBAM benchmarks, emissions and default-value methodology, and product scope.

Price

CBAM certificates are calculated from EU ETS auction prices: quarterly in 2026 and weekly from 2027. The published CBAM certificate price was EUR 75.36/tCO2 for Q1 2026 and EUR 75.28/tCO2 for Q2 2026 (LINK ARTICOLO NUOVO PREZZO). If the ETS review tightens allowance supply, strengthens the market stability reserve or confirms a stricter emissions path, EU Allowance (EUA) prices can receive support. The same imported tonne would then carry a higher CBAM certificate price, even if the supplier's embedded emissions do not change. If the review adds flexibility, delays scarcity or lowers pressure on industrial operators, the price signal can weaken.

Free allocation

This is the largest near-term variable for importers. CBAM is designed to replace free allocation gradually. EU producers still receiving free allowances do not bear the full carbon cost on the covered output. Importers therefore surrender a number of CBAM certificates adjusted for the free allocation still available to comparable EU production. Commission implementing regulation (EU) 2025/2620 sets the rules for calculating this free allocation adjustment. If the ETS review slows the phase-out of free allowances for industry, importers surrender fewer CBAM certificates for longer. CBAM cash exposure can remain lower through the first years of the definitive regime, even if the certificate price stays around the same level. Conversely, if the ETS review accelerates the phase-out, the adjustment shrinks faster. Importers surrender more certificates. High-emission suppliers lose competitiveness sooner, and verified actual emissions data becomes more important in price negotiations.

Benchmarks

Benchmarks are used under the EU ETS to determine free allocation for EU installations. Under CBAM, the same benchmark logic affects the free allocation adjustment to the certificates importers surrender. The Commission has already published definitive-period CBAM benchmarks under Regulation 2025/2620. If ETS benchmark treatment becomes more generous for energy-intensive sectors, EU producers receive more free allocation and importers receive a larger CBAM adjustment. If benchmarks tighten, the adjustment decreases and imports carry a higher certificate obligation.
For steel, this is not a single market-wide number. Different production routes correspond to different benchmark logics. Importers comparing suppliers should not treat all steel products as one carbon-cost category.

Default values and emissions methodology

Definitive-period default values are legally set by Commission Implementing Regulation (EU) 2025/2621. They apply when actual embedded emissions are unavailable or cannot be used. The ETS review may not revise CBAM default values directly. It can still create the policy pressure for later changes if the EU adjusts emissions methodology, expands indirect-emissions treatment or adds stricter anti-circumvention rules. For importers the commercial effect changes if default values become stricter or remains the same. In the first case, missing supplier data becomes more expensive. If actual verified emissions are accepted and lower than the default, the supplier gains a cost advantage in EU sales.

Indirect emissions are part of the same methodology risk. In June 2026, the Commission published a technical study on indirect emissions in CBAM. The study covers default emission factors, actual indirect-emissions claims, direct technical links, power purchase agreements (PPAs), verification and possible extension to additional sectors. If electricity-related emissions are treated more strictly, aluminium, fertilisers, hydrogen and EAF steel produced in coal-heavy grids are exposed first. A supplier using EAF production can have lower direct emissions than a blast furnace route while still carrying material electricity-related exposure.

Scope expansion and anti-circumvention

On 12 June 2026, the Commission said the Council had agreed to extend CBAM to specific downstream goods and reinforce anti-circumvention safeguards. A steel input can be processed outside the EU and enter as a downstream article. If that article remains outside CBAM, the import can carry a lower carbon cost than the covered steel input. For CBAM-impacted materials the same principle applies through different product chains. The importer has to check whether the product code, production route and precursor treatment still match the expected CBAM exposure after any scope update.

Conclusion

The 17 July review should be read as a possible change to CBAM parameters. For importers, the first check is whether free allocation is slowed, frozen or extended. The second is whether EUA price pressure changes. The third is whether benchmark treatment alters the free allocation adjustment. The fourth is whether default values or emissions methodology become stricter. The fifth is whether downstream products move closer to CBAM coverage.

After 17 July, importers should update their models and forecast against the updated policy. The highest-risk assumption is the free allocation path. If the EU gives industry a slower phase-out, CBAM can remain cheaper for longer. If the EU tightens the ETS, the importer needs a clear and reliable supplier-data strategy.