Full definition
Since 2005, EU ETS has allocated a share of free allowances to sectors exposed to carbon leakage risk (steel, aluminium, cement, fertilisers). As CBAM now protects these sectors on imports, free allowances are withdrawn in stages: the CBAM factor, meaning the share of emissions charged, rises from 2.5 % in 2026 to 100 % in 2034, with a sharp step between 2029 (22.5 %) and 2030 (48.5 %). For a European producer, this is the central issue: carbon costs rise in stages over nine years. Export competitiveness is not protected by CBAM, hence the debate over export rebates.
Also known as
- Allocation gratuite
- Free allocation