Prices for European carbon credits traded 4% lower during the financial week ended February 28 compared to the previous week.
This was reported by S&P Global.
Analysts noted that prices did not react strongly to the news that the European Commission wants to change the schedule for the sale of carbon certificates under its Carbon Based Import Adjustment Mechanism (CBAM) and move to a mass-based threshold. According to them, the proposal to simplify the CBAM was welcomed by most carbon analysts and traders. Many of them pointed out that some of the changes related to CBAM certificates are mainly technical in nature.
According to Dan Maleski, Senior Advisor for Environmental Markets at Redshaw Advisors, these innovations may alleviate some of the pressure, but the level of financial risk remains unchanged.
“Companies will still be responsible for emissions in 2026, but will not have to fully account for them until 2027. This postponement does not remove the financial burden, it just shifts the time when it comes,” he added.
The simplifications proposed by the European Commission solve many bureaucratic problems for small importers. This was stated by Nicholas Endress, CEO and founder of ClimEase, a company that develops software solutions for CBAM, in an interview with Platts.
“The elephant in the room is still the [carbon intensity] benchmarks, and until they are established, it is difficult for companies to place their orders for 2026,” he added.
According to the expert, this is because without established benchmarks, companies cannot calculate the cost of their CBAM tariffs, which could be very high as early as 2026, adding significant uncertainty to their planning and financial forecasts.
“The process of obtaining CBAM-approved benchmarks is still ongoing, and there is no clarity as to when it will be completed, but it should be by the end of the year,” the expert predicts.
S&P Global reminded that the EU's carbon intensity indicators are one of the factors in the final cost of the CBAM tax. They reflect the best-in-class emissions intensity for each product category. The CBAM tax will be calculated based on the difference between imported CBAM emissions and this benchmark.
Earlier, EcoPolitic reported that the European Commission proposes to the European Parliament and the Council to amend Regulation (EU) 2023/956 and postpone payments under the carbon adjustment mechanism for imports until February 2027.
Other innovations regarding CBAM were discussed in this material.
