Synopsis report on CfE on free allocation adjustment in CBAM

Synopsis report on CfE on free allocation adjustment in CBAM

Synopsis Report: CfE on the implementing act for free allocation adjustment PAGE | 1

Synopsis report on the Call for Evidence on “CBAM certificates – adjustment of obligation to surrender them to take account of free ETS allowances” 1. EXECUTIVE SUMMARY The European Commission launched three Calls for Evidence (CfEs) to support the preparation of the implementing acts for the definitive phase of the Carbon Border Adjustment Mechanism (CBAM). The calls for evidence covered the following three areas: (i) methodology for the definitive period, (ii) the carbon price paid in third countries, and the (iii) free allocation. The synopsis report focuses on the feedback received on the free allocation adjustment. This report summarises and provides an analytical overview of 150 answers to the call for evidence (CfE) on free allocation adjustment in the CBAM, of which 30 answers were coming from one of the other two related CfEs. Overall, responses reflected the fact that little was known by stakeholders yet at the time of consultation.
In general, many stakeholders agreed to the principle of aligning CBAM benchmarks with the EU ETS benchmarks, although several answers from stakeholders in the EU hinted at a need for even more ambitious approaches (like global best values). There were split views on whether it would be best to differentiate benchmarks by production route or not.

s in the EU hinted at a need for even more ambitious approaches (like global best values). There were split views on whether it would be best to differentiate benchmarks by production route or not. Some consensus was found in replies regarding the need to include precursors in the CBAM benchmarks, although only 12 answers explicitly mentioned the topic.
A remark frequently raised was that the rules on free allocation adjustment and the CBAM benchmarks are urgently needed for planning future production and trade. While the need for confidentiality was mentioned only occasionally, a larger number of respondents requested transparency, asking for information on how the benchmarks were developed, and clear tables listing the CBAM benchmarks against CN codes. The latter measure immediately borders on the question of administrative burden, which respondents usually asked to keep as low as possible. Hence, rules were requested to be simple and clear, with some respondents also mentioning the need for good guidance material and support by easy- to-use IT tools. The comments have been taken into account by designing the rules for the free allocation adjustment as simple as possible while ensuring strong alignment with the EU ETS. Moreover, the Commission envisages to provide guidance material and support through IT tools.

e allocation adjustment as simple as possible while ensuring strong alignment with the EU ETS. Moreover, the Commission envisages to provide guidance material and support through IT tools.

INTRODUCTION AND SCOPE OF WORK To support the preparation of three implementing acts for the definitive phase of the Carbon Border Adjustment Mechanism (CBAM), the European Commission (DG TAXUD) launched three Calls for Evidence (CfEs)1. Each Call focused on one of the implementing acts that will operationalise key elements of the CBAM framework: • Implementing act on the calculation methodology – rules for determining embedded direct and indirect emissions in CBAM goods, including the use of actual values and default values; • Implementing act on free allocation adjustment – rules for adjusting the number of CBAM certificates to be surrendered in order to reflect the gradual phase-out of free allocation under the EU ETS;

1 https://taxation-customs.ec.europa.eu/news/cbam-call-evidence-emission-methodology-free-allocation-adjustment-and-carbon-price-paid-third-2025-08-29_en

out of free allocation under the EU ETS;

1 https://taxation-customs.ec.europa.eu/news/cbam-call-evidence-emission-methodology-free-allocation-adjustment-and-carbon-price-paid-third-2025-08-29_en

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• Implementing act on carbon pricing – rules for deducting from the CBAM liability the explicit carbon price paid in a third country. Through these CfEs, stakeholders were invited to provide feedback, information, data and evidence on the technical, practical and administrative implications of the proposed rules for these implementing acts. The CfEs were open for feedback from 28 August 2025 until 25 September 2025.

2.1 Outputs of this work The overarching objective of the CfE was to provide evidence-based input to the Commission for the definitive phase of CBAM on the implementing act on free allocation adjustment. This synthesis report thus aims to: • provide an integrated overview of stakeholder feedback, organised by key topic; • highlight areas where stakeholder views converge or diverge, including differences between stakeholder groups and sectors; and • identify issues that may have implications for the design, implementation or administration of the three implementing acts.

2.2 Scope and stakeholders The consultation was open to all members of the public, including companies, business associations, NGOs, public authorities, academics, consultants and individual citizens, both within the EU and internationally.

was open to all members of the public, including companies, business associations, NGOs, public authorities, academics, consultants and individual citizens, both within the EU and internationally. Inputs were welcomed from any organisation or individual with an interest in CBAM, its implementation, or its interaction with the EU ETS and international carbon pricing systems. The scope of contributions therefore included: • comments on the design, clarity and feasibility of the methodologies set out in the CfE; • evidence concerning data availability, sector-specific constraints or operational challenges; • sectoral perspectives from producers, importers, traders and associations active in CBAM-covered industries; • views from non-EU stakeholders, including major exporting countries; and • general commentary on the broader policy context, including issues outside the scope of the implementing acts (reported statistically only).

CONSULTATION METHODOLOGY 3.1 Analytical approach The Call for Evidence invited stakeholders to provide input through stand-alone, open-ended questions and, where relevant, attachments such as position papers. Stakeholder submissions were often extensive, heterogeneous in structure, and varied widely in the level of detail provided. The analytical approach was designed to treat this material consistently and to enable comparability between submissions received. All submissions were compiled into one Excel working dataset containing stakeholder details, free-text responses and any attachments.

ently and to enable comparability between submissions received. All submissions were compiled into one Excel working dataset containing stakeholder details, free-text responses and any attachments. Each dataset was then screened and cleaned. This included removing duplicate entries standardising the text so that it could be analysed consistently. Once cleaned, stakeholders were grouped by relevant characteristics such as industry sector, stakeholder type and geographic origin.

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Where attachments were not in English, they were translated using AI-assisted tools, which provide translations of sufficient quality for this type of analysis. Stakeholder inputs were then reviewed and mapped to a predefined set of key topics and sub-topics reflecting the structure of the Commission’s CfE. This process combined manual review with targeted keyword searches to ensure that all comments relevant to the methodology were captured, regardless of how stakeholders structured their submissions.

Analysis of responses to the Call for Evidence 4.1 Overview of respondents to the CfE on the implementing act for free allocation adjustment The Call for Evidence on the implementing act for free allocation adjustment for the definitive period received 126 valid stakeholder submissions. In the analysis in this report, 4 more inputs were considered which the Commission received from stakeholders by email due to technical issues. Therefore, a total of 130 responses were counted.

ns. In the analysis in this report, 4 more inputs were considered which the Commission received from stakeholders by email due to technical issues. Therefore, a total of 130 responses were counted. These included free-text responses submitted through the consultation platform and a range of attachment-based inputs such as position papers, technical notes and letters. No duplicate or invalid entries were identified in the dataset provided, meaning all 130 contributions were retained for analysis. Furthermore, 14 answers given to the “methodology” CfE and six answers given to the CfE on “carbon price in a third country” also touched the topic of free allocation adjustment, and were consequently included in this report, resulting in a total of 150 responses analysed. Geographical distribution Respondents represented a broad geographical spread: 97 responses (65%) originated from 19 Member States and 3 responses (2%) from EFTA countries. The largest shares came from Belgium2 (28; 29% of EU answers), Germany (13; 13%) and Italy (12; 12%). A further 50 responses (33% of total) were submitted from outside the EU or EFTA. Of these, the largest shares came from Türkiye (10; 20% of non-EU answers), Egypt (8; 16% each), and China and Japan (each 4 answers; 8%). Figure 1. Geographical distribution of responses

2 This includes responses from European industry associations which are usually situated in Brussels. Member state 65% EFTA 2% Outside of EU or EFTA 33%

aphical distribution of responses

2 This includes responses from European industry associations which are usually situated in Brussels. Member state 65% EFTA 2% Outside of EU or EFTA 33%

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Organisation type The majority of inputs were submitted by businesses and business associations, with 63 companies or businesses (48%) and 43 business associations (33%). Other contributors included public authorities (4%), individual citizens (5%, including EU and non-EU), environmental organisations (4%) and others (6%). This distribution highlights that the consultation predominantly attracted respondents directly affected by CBAM obligations, particularly companies operating within CBAM-covered value chains and their representative associations.

Figure 2. Type of respondent

Organisation size Among respondents identifying as companies or businesses, participation was weighted towards larger firms, with 49 large companies (39%), 12 medium enterprises (10%), 29 small-sized companies (23%) and 30 micro enterprises (24%).

Company/business 48% Business association 33% Public authority 3% Non-governmental organisation (NGO) 4% Academic/research Institution 1% EU citizen 3% Other 6% Non-EU citizen 2% Trade union 0%

Company/business 48% Business association 33% Public authority 3% Non-governmental organisation (NGO) 4% Academic/research Institution 1% EU citizen 3% Other 6% Non-EU citizen 2% Trade union 0%

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Figure 3. Respondent companies by size

Sectoral representation Responses were received from a wide range of sectors covered by or affected by CBAM, with the most represented sectors being iron and steel (31 respondents; 34% of answers with industry sector identified), general or cross-sector (23 respondents; 26%), cement (11 respondents; 12%), aluminium (5 respondents; 6%), fertilisers (4 respondents; 4%), electricity (2 respondents; 2%) and chemicals – hydrogen (2 respondents; 2%). Furthermore, there were 12 responses from the chemical sector or sectors not yet included in the CBAM. The remaining respondents could not be assigned to a specific industrial sector. Figure 4. Respondents by sector

Type of submission A significant share of respondents provided substantive attachment-based inputs, such as detailed position papers. These allowed stakeholders to elaborate on technical and sector-specific issues that could not be fully expressed in free-text fields. Out of the 150 responses analysed, 90 (60%) included attachments. Large (250 or more) 38% Micro (1 to 9 employees) 23% Small (10 to 49 employees) 22% Medium (50 to 249 employees)… N/A 8% Iron and steel 34% Chemicals - other 3% Aluminium 6% General 26% Sector not yet covered 10% Chemicals - Hydrogen 2% Cement 12% Fertilizers 5% Electricity 2%

2% Medium (50 to 249 employees)… N/A 8% Iron and steel 34% Chemicals - other 3% Aluminium 6% General 26% Sector not yet covered 10% Chemicals - Hydrogen 2% Cement 12% Fertilizers 5% Electricity 2%

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4.2 Quantitative and qualitative analyses of stakeholder responses In total, 150 answers were assessed. The majority of these (130 answers) were given directly to the Call for Evidence (CfE) on free allocation adjustment. However, 14 answers given to the “methodology” CfE and six answers given to the CfE on “carbon price in third countries” also touched the topic of free allocation adjustment, and were consequently included in this report. On the other side, 32 answers also contained comments on the methodology CfE, and 27 regarding the “carbon price” CfE. Of the total 150 answers, 8 were identified as having no relation to the free allocation implementing act, but touch on the CBAM in general. No answer was completely rejected as “junk reply”, although 34 were considered of low relevance due to their limited detail or generic nature. Replies were considered as low relevance if e.g. they ask only questions instead of presenting a position, if they are just generic statements such as “carbon emissions should not have costs, but reducing them should be rewarded”. At the time when the call for evidence was open for comment, a draft act was not yet available. Therefore, many answers are based on speculations or expectations which were not always correct.

ed”. At the time when the call for evidence was open for comment, a draft act was not yet available. Therefore, many answers are based on speculations or expectations which were not always correct. Although from the current viewpoint, some of the answers are superseded, they have been included for completeness in this report. Also comments that do not concern the implementing act on the free allocation adjustment, and neither the other two CfEs, were included in this report if made in response to the free allocation CfE. This concerns e.g. comments which aim at changes in the CBAM Regulation or even in the EU ETS and its legislation. This section summarises the main points raised by stakeholders regarding the rules under Article 31 of the CBAM Regulation, including the CBAM benchmarks, i.e. how the CBAM obligation is to be adjusted for the free allocation an installation would have received for producing the imported good had it been an EU ETS installation. In this report, we refer to this adjustment as the “embedded free allocation”, or where it is expressed per tonne of good, as “specific embedded free allocation” (SEFA).

4.2.1 Co-ordinated responses (campaigns) Steel sector:
The position paper by Eurofer3 was attached without change by five other stakeholders of the steel sector (companies or associations at Member State level), and one further respondent presented two out of the three main points of Eurofer. Hence, in total seven of the answers are fully or partly co-ordinated.

anies or associations at Member State level), and one further respondent presented two out of the three main points of Eurofer. Hence, in total seven of the answers are fully or partly co-ordinated.
Two companies in the Egyptian steel industry submitted identical responses. Cement sector:
There are three cases of co-ordinated responses, twice covering two and once three responses: • The Cembureau answer partly overlaps with the answer by the Austrian Cement association (Vereinigung der Österreichischen Zementindustrie)
• The answer of three smaller cement companies (using imported clinker) is partly identical or at least putting forward the same points); • The answer of two smaller companies (one in Spain, one in France) are very similar. Other: The answers of IFIEC4 (industry association at EU level), UNIDEN5 (association, France) and a French chemical company have some textual similarities.

3 European Steel Association 4 International federation of industrial energy consumers 5 Union des Industries Utilisatrices d'Énergie

a French chemical company have some textual similarities.

3 European Steel Association 4 International federation of industrial energy consumers 5 Union des Industries Utilisatrices d'Énergie

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The answers of EIGA6 and Air Liquide (FR) contain common elements. An Italian company (importer of CBAM goods) seems to have submitted its answer in triplicate.

4.2.2 Key topic areas The following main areas of interest have been identified from the Commission’s point of view: • Do stakeholders agree with the overall approach to define CBAM benchmarks using the existing EU ETS benchmarks? • On the benchmark design: − Should some production routes be distinguished in sectors where such distinction is made in the EU ETS? − In what way should the specific embedded free allocation (SEFA) of precursors be taken into account for CBAM benchmarks of complex goods? − What are the stakeholders’ views regarding the inclusion of indirect emissions in the CBAM benchmarks, regarding the exchangeability of electricity and fuels (a rule that was recently removed from the EU ETS’ free allocation rules), and regarding any electricity-related topic in general? • Transparency or confidentiality issues; • Concerns or proposals made for limiting or reducing administrative burden; • Stakeholders’ concerns about timing of publishing CBAM benchmarks.

general? • Transparency or confidentiality issues; • Concerns or proposals made for limiting or reducing administrative burden; • Stakeholders’ concerns about timing of publishing CBAM benchmarks. 4.2.3 Issues raised by stakeholders by key topic Compatibility of CBAM benchmarks with the EU ETS:
In total, 70 of 150 respondents mentioned in some way that they expect or wish that the CBAM benchmarks are to be aligned with the EU ETS benchmarks. In 15 cases, these replies were qualified by further explanations or demands, such as: • The CBAM benchmarks need regular updating; • Benchmarks need to be sufficiently granular – in parallel, other responses highlighted the need to have a clear table for correlating CN codes to CBAM benchmarks; • The CBAM benchmarks must provide a level playing field compared to the EU ETS; • A stakeholder from the EU aluminium industry highlighted the concern that loopholes need to be avoided (which likely means the issue of correctly distinguishing primary and secondary aluminium); • 4 respondents (of which 3 seem to be from a co-ordinated response) proposed that heat imported from a non-ETS installation (e.g. using “green” technologies) should be deducted from the respective CBAM benchmark. • In one case (glass industry, which is not yet covered by the CBAM) it was mentioned, that an “alignment factor” would be needed, as the relevant EU ETS product benchmarks are not directly related to the quantity of final goods.

hich is not yet covered by the CBAM) it was mentioned, that an “alignment factor” would be needed, as the relevant EU ETS product benchmarks are not directly related to the quantity of final goods. • One respondent (an EU NGO) stated that no CBAM benchmarks should be necessary at all, and that EU ETS benchmarks should be used directly. • One answer from a company performing imports indicated that for goods which are not produced in the EU at all, a global benchmark should be developed. The Commission considers the above-mentioned replies as mostly in agreement to the approach chosen: CBAM benchmarks have been derived from the EU ETS benchmarks and listed in a clear table indicating

6 European Industrial Gases Association

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the relevant CBAM benchmarks for each CN code. However, a distinction of different heat sources was not implemented, since the “non-ETS heat” in the EU ETS does not necessarily mean clean technologies, and a distinction in the CBAM is not feasible. Also, solely relying on ETS benchmarks would not be feasible, as CBAM applies to specific products, including precursors of complex goods, hence requiring the development of dedicated CBAM benchmarks. Three respondents asked for the CBAM benchmarks to be based on the “average 10% best installations”, where some identified “in the EU”, “world-wide” or did not specify this.

icated CBAM benchmarks. Three respondents asked for the CBAM benchmarks to be based on the “average 10% best installations”, where some identified “in the EU”, “world-wide” or did not specify this. Although this is a demand that is close to the EU ETS method, it would not lead to a full alignment of the benchmarks, since for the EU ETS every 5 years the benchmarks are updated using the new “best 10%”, but with limits for a minimum and maximum improvement rate. These CfE answers were therefore not counted as request to align the EU ETS and the CBAM benchmark. The coordinated responses from steel stakeholders answered in a similar way, but with a view to focus not only on the best installations, but even only on the one best technology available. Again, this would be a deviation from the EU ETS methodology, where different product benchmarks are defined for the main production routes. This suggestion was therefore not integrated. Other answers that were not counted as requesting alignment with the EU ETS are: • One respondent from the non-EU steel industry noted that CBAM benchmarks should be higher than EU ETS BM, in order to compensate other available subsidies in the EU (e.g. innovation fund); • Another answer criticised that the EU ETS benchmarks are too low to be met by developing countries. • An EU industry stakeholder requested a “safety margin” on EU ETS benchmarks to ensure competitiveness, which might be meant like a reverse “mark-up” known for the default values of embedded emissions.

EU industry stakeholder requested a “safety margin” on EU ETS benchmarks to ensure competitiveness, which might be meant like a reverse “mark-up” known for the default values of embedded emissions. • One respondent (non-EU) proposed to provide CBAM benchmarks higher than in the EU ETS, with a transition phase to reach those of the EU ETS. • A stakeholder from the fertilizer sector in the EU proposed that free allocation levels should be fixed for 2026-34. However, should this mean not the benchmarks but the free allocation adjustment as such, this would contradict the EU ETS Directive.
• One stakeholder from a third country pointed out that the benchmarks must reflect the principle of "common but differentiated responsibilities". • One stakeholder considered that for competitiveness reasons, no adjustment for free allocation should be made at all. As those comments are not in line with Article 31 of the CBAM Regulation, which requires strong alignment with free allocation levels granted in the EU ETS, these comments could not be taken into account for the implementing act.

Answers highlighting methodological issues: • One answer from a non-EU country stated that setting CBAM benchmarks for each CN code would be too ambitious, and they should be set at the level of the “aggregated goods categories”. • One respondent asked to design the benchmarks in a way that the bubble approach (as specified in the implementing act on the methodology to determine embedded emissions) can be used.

categories”. • One respondent asked to design the benchmarks in a way that the bubble approach (as specified in the implementing act on the methodology to determine embedded emissions) can be used.
• The difficulty of transposing EU ETS “installation-level” to “goods-related” CBAM benchmarks was mentioned several times, although without opposing it. • Two co-ordinated responses of the cement industry were concerned whether there would be an impact from the “change of the clinker benchmark to a binder benchmark” in the EU ETS. • One respondent proposed to use verified CBAM data for cases where in the EU no product benchmark is defined. • Three respondents proposed to make the free allocation adjustment of the CBAM more complex than indicated by the Commission in its call for evidence:

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− One respondent considered that the ALC (activity level change) rule should be fully reflected in the CBAM (i.e. adjustment of free allocation in case of significant production increases or decreases). − One considered that the full system of EU ETS product benchmarks and fall-back approaches should be mirrored in the CBAM. − One asked to use a proxy for indicating the installation’s position on the benchmark curve, which is unclear in its meaning. Such approach is not used in the EU ETS. • The involvement of (industry) stakeholders in the development of CBAM benchmarks was requested occasionally. The Commission took note of these comments.

Such approach is not used in the EU ETS. • The involvement of (industry) stakeholders in the development of CBAM benchmarks was requested occasionally. The Commission took note of these comments. The calculation method for the free allocation adjustment was designed as simple as possible while ensuring strong alignment with the EU ETS. An approach was developed that has no specific need for ALC rules or fallback sub-installations.
Distinction of production routes
28 out of the total 150 respondents commented on this topic. The positions given were very heterogenous, ranging from a general positive response (need to distinguish routes for compatibility with the EU ETS) to strong opposition, mainly motivated by concerns about competitiveness and/or circumvention. 21 of the 28 responses were from the metals sector (either Aluminium or Iron and steel).
• 16 respondents were in favour of differentiating benchmarks by production route where necessary. Some further comments were added: − One comment asked, if this differentiation was feasible and how it can be done. − DRI (direct reduced iron): Three EU operators’ comments said that a dedicated benchmark would be required, where one explicitly stated that it needs to be higher than the benchmark for scrap/EAF. One other EU industry from the downstream sector claimed that it would be better to treat DRI with the blast furnace related “Hot metal” benchmark from the EU ETS. However, that stakeholder also recommended a reduction in the spread between benchmarks.

d that it would be better to treat DRI with the blast furnace related “Hot metal” benchmark from the EU ETS. However, that stakeholder also recommended a reduction in the spread between benchmarks. A third answer proposed to either use the hot metal benchmark or to create an extra benchmark for DRI. − One EU respondent from the steel sector asked for the introduction of the “melted and poured” principle for crude steel and focusing the benchmark then only on the downstream processes in the respective country, in order to avoid circumvention. − One EU industry stakeholder asked for a differentiation of the benchmark by production route, while for specific embedded emissions such distinction should not be allowed. − A non-EU respondent added that also routes not used in the EU should be considered for development of a dedicated benchmark, if the EU ETS approach does not fit. − One stakeholder indicated that a rule would be required for steel that is a mixture produced via different routes. − Two co-ordinated answers from the hydrogen sector mentioned concerns about the competition between hydrogen production inside e.g. chemical installations vs. outsourced production. Whether this should have an impact on the CBAM benchmarks is not fully clear. − For a product not yet included in the CBAM (soda ash) it was mentioned that a dedicated benchmark for soda ash from natural sources would be required.

t on the CBAM benchmarks is not fully clear. − For a product not yet included in the CBAM (soda ash) it was mentioned that a dedicated benchmark for soda ash from natural sources would be required. • On the side of the negative answers, the following comments were added: − The answers co-ordinated by steel stakeholders demand that the scrap EAF benchmarks should apply to all imports of “long products”. For all other goods, the benchmark should be based on the most efficient technology. − One non-EU respondent proposed that benchmarks should be developed per country rather than by technology.

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The Commission took these comments into account as far as possible without sacrificing the prime principle to align the methodology with the EU ETS. Therefore, production route-specific benchmarks were introduced for steel and aluminium. A single deviation from the EU ETS was found relevant, i.e. the development of a benchmark specific to DRI, which is not yet given in the EU ETS. Taking into account precursors Only twelve of the respondents, and the co-ordinated responses from steel stakeholders mention the relevance of precursors for the determination of CBAM benchmarks. The steel industry respondents demand that all stainless-steel benchmarks should reflect the lowest content in virgin ferro-alloys, i.e. they should be as low as possible, which appears to be a competitiveness/circumvention-related point. The other twelve responses mention the following issues: • Six respondents only state that precursors are to be considered.

sible, which appears to be a competitiveness/circumvention-related point. The other twelve responses mention the following issues: • Six respondents only state that precursors are to be considered. • One answer from the fertilizer industry also agrees and asks for the most conservative approach on different NPK fertilisers. • Two further responses from the cement industry explicitly mention clinker as important contributor. • One answer from the aluminium industry mentions the need to distinguish precursors, but as this is related to production routes, it can be implied that the answers given from the sector on production routes (see above) can be considered as directly related. • One respondent asked whether the precursors will be part of the CBAM benchmarks. • One EU NGO which favours direct use of EU ETS benchmarks explains that the precursors’ product benchmarks in the EU ETS will form the major part of the free allocation adjustment.
The Commission took note of those comments. Applying the principle to follow the EU ETS, which in this case means also following the methodology for determining embedded emissions of CBAM goods, there was no choice but to include the precursors’ “embedded free allocation” for the purpose of the CBAM benchmarks. However, flexibility is required where operators are able to use actual data. Therefore, the implementing act provides a formula for taking into account the precursors in the case of actual data.

s. However, flexibility is required where operators are able to use actual data. Therefore, the implementing act provides a formula for taking into account the precursors in the case of actual data. For the purpose of using default values for embedded emissions, a second benchmark for each CN code has been provided that already contains the embedded free allocation of the precursors. Indirect emissions, exchangeability of electricity and fuels
Only one respondent (EU steel sector) asked for indirect emissions to be included in the CBAM benchmark. One EU business association asked for the old (abandoned) rule on exchangeability to be applied to the CBAM benchmarks. The co-ordinated answers by the steel industry strongly emphasise that for the EU ETS benchmarks for electric arc furnaces (EAF), CBAM benchmarks “should consider fuel/electricity exchangeability”.
A respondent from the EU cement sector explicitly requested the CBAM benchmarks be focussed on direct emissions only. The Commission took into account the comment made by the steel sector and acknowledged that the rules in the EU ETS are changing from 2026 onwards. Therefore, CBAM benchmarks for EAF steel are proposed to be based on direct emissions only, as for all other sectors. Transparency/confidentiality issues
Of the 150 answers assessed, 22 mention points related to transparency. Only one respondent (non-EU) stressed that confidentiality is an issue (the importers should not receive underlying data).

s
Of the 150 answers assessed, 22 mention points related to transparency. Only one respondent (non-EU) stressed that confidentiality is an issue (the importers should not receive underlying data). The other respondents generally mentioned that transparency would be needed, with clear tables of benchmarks (per CN code) to be published. Some respondents also reminded that the underlying assumptions and methodology of determining the CBAM benchmarks should be published.

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Several respondents mentioned need for strong verification, verifiability of data or the need to provide dedicated guidance for verifiers. The topic of confidentiality is solved in a combination of the implementing act on methodology and the delegated act on verification and accreditation, by distinguishing a full emissions report and a summary report without sensitive data.
Concerns regarding administrative burden 33 stakeholders mentioned the administrative burden or effort required by the CBAM.

g a full emissions report and a summary report without sensitive data.
Concerns regarding administrative burden 33 stakeholders mentioned the administrative burden or effort required by the CBAM. Specific points made include: • The application of CBAM benchmarks must be sufficiently simple for SMEs and for non-EU operators; one answer stated that in particular developing countries need support / funding; • The implementation needs at least two years preparation (3 co-ordinated answers from the cement sector); another answer requested a grace period for SMEs; • A balance of precision and feasibility is necessary; • Rules must be simple and comprehensible; • Guidance material and IT tools free of charge would be welcome; regarding IT, some answer requested that the complexity should be reduced by letting the IT system [the CBAM Registry] pre-fill or support in filling the CBAM declaration.
• A non-EU country asked to “clarify the possibility of connecting the CBAM registry with national information systems relating to carbon markets or emission management mechanisms.” The Commission is already planning to update existing guidance documents and templates. In addition, declarations in the CBAM Registry will include functions to prefill specific fields, in particular when reporting based on default values. By integration of free allocation data in the emissions report / verification report, administrative burden will be minimised.

specific fields, in particular when reporting based on default values. By integration of free allocation data in the emissions report / verification report, administrative burden will be minimised. Urgency of the need for the Implementing Act:
The most frequently mentioned concern aside from technical issues is the fact that at the time of the CfE, neither the CBAM benchmarks nor the approach for how they are to be applied had been provided. Consequently, 34 stakeholders claimed that this situation was problematic because in particular importers and downstream users of CBAM goods, but also their producers, could not determine the expected CBAM obligation, i.e. the products’ costs upon import. Therefore, some of them claimed that contracts cannot be negotiated for purchase of these goods, and the benchmarks and the rules for applying them would be urgently needed as soon as possible. Two stakeholders explicitly asked for a delay of the start of the CBAM by six months or one year, respectively, while another one requested to provide provisional benchmark values for the use during the first half year of 2026.
The Commission took these concerns into account. The implementing act includes a list of CBAM benchmarks derived from the estimated new EU ETS benchmarks for the period 2026-2030 which will apply as of January 2026. Within a month of the adoption of the updated EU ETS benchmarks (expected within the first semester of 2026), a recital asks to update the CBAM benchmarks accordingly, which will then apply as of January 2027.

th of the adoption of the updated EU ETS benchmarks (expected within the first semester of 2026), a recital asks to update the CBAM benchmarks accordingly, which will then apply as of January 2027.

4.2.4 Out of scope issues A substantial proportion of respondents raised issues that fall outside the scope of the implementing act on free allocation adjustment. In line with the analytical approach set out in the consultation methodology, these topics were counted quantitatively but not subject to qualitative analysis, as they would require

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changes to the CBAM Regulation, the EU ETS Directive, or other legislative instruments, rather than adjustments to the implementing act under consultation. CBAM as carbon leakage instrument According to ten stakeholders, the CBAM is seen as inferior compared to free allocation in the EU ETS as an instrument for mitigating carbon leakage, or at least not yet proven to work well enough. The European aluminium industry summarized the issue as the need for a "stop the clock" on aluminium in CBAM in general. 18 stakeholders requested that the phase-out of free allocation under the EU ETS should be delayed or revised to several degrees. This ranged from general statements of need to assess if the CBAM is actually effective, to concrete proposals for timelines (e.g. up to 2030, or to extend EU ETS free allocation by 5 to 6 years). Only two respondents were explicitly in favour of phasing out free allocation as required by the EU ETS Directive.

timelines (e.g. up to 2030, or to extend EU ETS free allocation by 5 to 6 years). Only two respondents were explicitly in favour of phasing out free allocation as required by the EU ETS Directive. Seven replies to the CfE requested that an instrument for supporting exports against carbon leakage should be provided. Four stakeholders expressed that the current mechanism of indirect cost compensation should be maintained. Diverse competitiveness concerns: 30 responses indicated diverse competitiveness concerns between imports and EU production. 12 replies dealt with the concern of circumvention, with a focus on the issue of recycled vs. primary metals and the treatment of scrap. A need for better alignment of CN codes was also mentioned. Issues relating to the CBAM scope: 15 replies mentioned issues with the scope of the CBAM. They can be summarised as follows: • Some downstream goods should be included: Explicitly mentioned were melamine, some household and cutting products, cables based on aluminium and steel, gabions,
• Organic chemicals and polymers should remain explicitly excluded; • Two co-ordinated responses requested to consider a change for hydrogen; • Tinplate should be excluded; • Graphite should remain excluded; • Soda ash: One respondent in favour, one against. • Glass: Two answers, one in favour, one indifferent, but wants clarity; • Export oriented installations using imported goods should be excluded from the CBAM.

ne respondent in favour, one against. • Glass: Two answers, one in favour, one indifferent, but wants clarity; • Export oriented installations using imported goods should be excluded from the CBAM. Issues concerning the CBAM Regulation:
27 replies to the free allocation adjustment CfE concerned issues not related to free allocation but to other areas of the CBAM Regulation.
• Several answers demand a delay of the introduction of the CBAM by different timelines. • There were several answers claiming that the CBAM is too complicated or bureaucratic. • For allowing a tracking of goods, not only operators, but stockholders (traders, warehouses) should have an obligation to monitor embedded emissions (as if the traded goods were precursors); • One reply recommends abolishing the inward processing procedure; • The rule on having to hold CBAM certificates (“the “80% rule”, changed by the Omnibus package to the “50% rule”) was criticised by six stakeholders. One of these responses suggested that it should be possible that a central entity should be allowed to hold these certificates for sharing them later to sub- entities in demand. • One stakeholder proposed that the use of other international credits (including voluntary markets) should be allowed for fulfilling CBAM obligation. • Weekly price setting of the CBAM certificate is deemed inadequate by two stakeholders. One stakeholder requested that certificates should be valid for a longer period.

ulfilling CBAM obligation. • Weekly price setting of the CBAM certificate is deemed inadequate by two stakeholders. One stakeholder requested that certificates should be valid for a longer period.

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• One respondent: Importers should get free allowances like operators in first phases of EU ETS, which they could sell like industry in the EU ETS. • One answer stated that revenues should go to developing countries, not the EU. Issues relating to the EU ETS Directive The following issues were raised although they do not concern the free allocation adjustment to which this CfE refers but rules provided for by the EU ETS Directive: • Some changes to the EU ETS free allocation were proposed, e.g. a change from emissions intensity to energy intensity, thereby supporting electrification of the industry. • Another proposal (made three times) is that the EU ETS benchmarks should be focussed even more on products and less on production processes. In particular, one respondent proposed to introduce a new benchmark for steel based on hydrogen/DRI (Direct Reduced Iron). • One respondent proposed a life-cycle approach to waste-derived fuels instead of the current zero-rating rule based on the Renewable Energy Directive (RED II). • In case soda ash were included in the CBAM and separate benchmarks would be introduced for natural and industrially produced soda ash, two differentiated benchmarks should also be used in the EU ETS.