CBAM Monthly News Update: July 2026

July 2026 was the busiest CBAM month since the definitive regime began. The European Parliament's environment committee adopted its position on the CBAM revision, backing an extension to more than 400 downstream product codes and a Temporary Decarbonisation Fund starting in 2027. The European Commission opened a consultation on the rules for buying and selling CBAM certificates through the new central platform, and its long awaited EU ETS review slowed the CBAM factor and pushed the phase-out of free allocation from 2034 to 2038. Meanwhile, the verification infrastructure moved towards its September milestone, when the first accredited verifiers are expected. Taken together, the month shaped both how much importers will pay and how they will pay it.

1. Parliament Backs CBAM Extension to More Than 400 Downstream Products

On 6 July 2026, the European Parliament's Committee on the Environment, Climate and Food Safety (ENVI) adopted its position on the revision of the Carbon Border Adjustment Mechanism. The report by rapporteur Mohammed Chahim (S&D, Netherlands) passed with 56 votes in favour, 11 against and 12 abstentions.^{1, 2}

MEPs went well beyond the European Commission's December 2025 proposal, which covered roughly 180 steel and aluminium intensive goods. The committee voted to extend CBAM to more than 400 product codes, including fasteners, wire, springs and household articles, while insisting that future additions must follow transparent and quantitative methodologies.^{2, 3}

The committee also strengthened the anti-circumvention provisions. The prohibition on slightly modifying goods would be clarified to cover slight processing as well, and where circumvention patterns are identified the Commission would be able to apply the default emission values of the true country of origin rather than the country of last shipment.³ A separate provision allowing CBAM to be temporarily suspended was deleted.¹

We covered the detail in our article on the Parliament position on CBAM downstream products.

2. Temporary Decarbonisation Fund Moved Forward to 2027

On the same day, ENVI adopted its position on the Temporary Decarbonisation Fund, in a report prepared by Pascal Canfin (Renew, France), by 59 votes to 16 with 12 abstentions.¹

The fund addresses the gap CBAM leaves on the export side: European producers in CBAM sectors lose free EU ETS allowances but receive no equivalent relief when they sell outside the European Union. MEPs widened the Commission's design by adding fertiliser products such as urea, ammonium nitrate and ammonium sulphate to the eligible list, and by moving the start forward so the fund runs from 2027 to 2029 rather than beginning in 2028.^{1, 2}

Both reports are scheduled for adoption in the plenary session of 14 to 17 September 2026, after which trilogue negotiations with the Council can begin. The Council agreed its own position in June 2026, and a final text is expected in late 2026 or early 2027.^{1, 2}

3. Commission Consults on the Rules for Buying CBAM Certificates

On 9 July 2026, the European Commission opened a public consultation on a draft delegated regulation governing the sale and repurchase of CBAM certificates. Feedback ran until 6 August 2026.⁴

The draft sets out how the common central platform will operate. The platform is established and managed by the Commission following a joint procurement procedure with Member States, whose agreement entered into force on 16 December 2025. Purchase requests are entered in the CBAM Registry, while payments are processed through the central platform. Sales start on 1 February 2027 and cover emissions embedded in goods imported during 2026.⁴

Two operational details attracted attention during the feedback period. Purchase requests cannot be amended once entered, and repurchase requests are irrevocable and non-amendable from the moment of submission, even before any authority review. Commentators also criticised the absence of a unified user interface, of API or ERP integration, and of a test environment before live operation, as well as a consultation window running through the European summer break.⁵

Because repurchase is limited to one third of the certificates remaining after surrender, and must be requested by 30 June, over-buying carries a permanent cost. Our guide to buying CBAM certificates through the central platform explains the mechanics.

4. EU ETS Review Slows the CBAM Factor and Extends Free Allocation to 2038

On 17 July 2026, the European Commission published its review of the EU Emissions Trading System, alongside a revised benchmarks proposal and an Electrification Action Plan. Together they set the legal framework for phase 5 of the system, running from 2031 to 2040 and aligned with the EU target of a 90% net emissions reduction by 2040.^{6, 7}

For CBAM sectors, the proposal reintroduces 15% of the free allocation that would otherwise have been withdrawn, starting in 2028, and completes the phase-out in 2038 instead of 2034. In CBAM factor terms, the factor rises from 90% to 91.5% in 2028, from 77.5% to 81% in 2029 and from 51.5% to 59% in 2030.⁸

Because the CBAM obligation mirrors the free allocation still granted, a higher CBAM factor means importers surrender fewer certificates in those years. In 2030 the obligation would fall from 48.5% to 41% of embedded emissions. The relief is a buffer rather than a cancellation: full exposure still arrives, four years later than previously scheduled. See our analysis of what the new CBAM factor means for importers.

5. Wider ETS Package: Softer Cap, Conditional Allocation and a €100 Billion Bank

The review also proposes a gentler cap trajectory, with the linear reduction factor dropping to 3.7% for 2031 to 2035 and 1.7% from 2036, against 4.3% today. The Market Stability Reserve intake rate halves from 24% to 12%, and dynamic reference points fall by 4% per year from 2029.^{6, 7}

From 2031, all free allocation becomes conditional on a verified decarbonisation investment plan, with 80% released once the plan is approved and the remaining 20% only after the investments are shown to have delivered the promised emissions cuts. The package adds an Industrial Decarbonisation Bank of €100 billion, whose first phase starts in 2028 as an Investment Booster of 400 million allowances worth roughly €30 billion, and extra free allocation worth €6 billion for industry over 2026 to 2030.^{6, 7}

Despite requests from European steel and aluminium producers, the proposal contains no export rebate mechanism. The Commission relies on the Temporary Decarbonisation Fund instead.⁸ The file now enters the ordinary legislative procedure, with agreement targeted by the end of the first quarter of 2027.⁷

6. Verification Infrastructure Approaches Its September Milestone

Away from the legislative headlines, the machinery that will validate emissions data moved forward. A guidance document on accreditation and verification was published during the summer of 2026, building on Commission Delegated Regulation (EU) 2025/2551 on verifier accreditation and Commission Implementing Regulation (EU) 2025/2546 on verification itself.⁹

The first CBAM verifiers are expected to receive accreditation around September 2026, which is also when the verifier module in the CBAM Registry opens. In the first year of verification, verifiers must carry out an on-site inspection of the installation where the goods are produced, with virtual visits and waivers limited to defined circumstances that have to be recorded in the verification report.^{9, 10}

The first verified annual CBAM declaration, covering 2026 imports, is due by 30 September 2027. Our overview of CBAM verification and accredited verifiers sets out what importers should arrange now.

7. Outlook: What July 2026 Means for Importers

Three conclusions follow from the month:

Scope keeps widening. Parliament wants more than double the number of downstream products the Commission proposed, so companies importing manufactured steel and aluminium goods should start screening their customs codes now.²
Costs arrive more slowly, not less certainly. The revised CBAM factor lowers certificate volumes between 2028 and 2033, but the full obligation still lands, in 2038.⁸
Execution risk is rising. A non-amendable purchasing process, a one third cap on repurchase and a limited pool of accredited verifiers all reward companies whose emissions data is accurate and documented well before the deadline.^{4, 9}

None of the July developments change the obligations of the current cycle. The 50 tonne de minimis threshold, the requirement to be an authorised CBAM declarant and the deadline of 30 September 2027 all remain in place. What changed in July is the shape of the years after that, and the level of precision the system will demand. Companies can compare their options on the CBAM Desk pricing page or browse earlier updates in our CBAM news archive.

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Hulsman & Partners

This article was produced in collaboration with Hulsman & Partners. Looking for expert guidance on CBAM compliance? Their team offers specialised consultancy to help your organisation navigate the Carbon Border Adjustment Mechanism.

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