Brussels looks to tighten CBAM verification rules, mandates site visits in 2026: draft text

The European Commission is preparing stricter verification requirements for its Carbon Border Adjustment Mechanism that would mandate physical site visits at all installations producing CBAM-covered goods in 2026, according to a leaked draft text of the implementing regulation seen by Platts.

The proposed rules introduce quantitative "materiality thresholds" and align CBAM verification more closely with EU Emissions Trading System (ETS) procedures as the bloc prepares for the mechanism's financial obligations to take effect from Jan. 1, 2026.

The draft regulations, currently being circulated among EU member states, outline principles for verifying emissions, which are determined based on actual values embedded in goods imported into the EU from 2026, rather than default values.

CBAM is currently in a transitional phase, requiring importers to report emissions without financial penalties. The mechanism enters its definitive phase on Jan. 1, 2026, with companies liable for their emissions. This is expected to have significant implications for carbon-intensive industries. CBAM currently covers the cement, iron and steel, aluminum, fertilizers, electricity and hydrogen sectors.

The draft regulations also establish a 5% materiality threshold for both total specific embedded emissions and total specific free allocation per product classification code.

This represents the first time CBAM rules have specified acceptable deviation levels in reported emissions data, providing verifiers with clear guidance on when emissions reports can be deemed unreliable.

A spokesperson at the European Commission declined to comment on the draft text. "We will comment when the proposal is adopted in December," the spokesperson said.

However, an EC official previously told Platts that the Commission would "adopt a number of implementing and delegated acts, including on the methodology, verification rules and carbon price by the end of the year."

The draft also outlines updated pricing methodologies for CBAM certificates, with quarterly pricing based on EU ETS auction clearing prices in 2026, transitioning to weekly calculations from 2027. The pricing mechanism aims to closely reflect EU ETS allowance values by using final EU ETS auction clearing prices.

Platts, part of S&P Global Energy, assessed EU Allowances for nearest December delivery at Eur80.72/mt CO2e ($93.39/mt CO2e) on Nov. 11.

Verification requirements

The move comes amid growing pressure on the EC to provide clarity on emissions calculations, default values and carbon costs, as importers scramble to estimate compliance costs and assess potential supply chain disruptions.

"I believe that the European Commission has underestimated how difficult this would be, and they have left it too late. They did not appreciate how much clarity would be required by industry," said Gabriel Rozenberg, the founder and CEO of CBAMBOO, a CBAM software compliance company.

These requirements create stronger incentives for companies to calculate actual emissions rather than rely on EU default values, according to Dan Maleski, a senior environmental markets adviser and CBAM lead at Redshaw Advisors.

"The default values are intentionally punitive, designed to penalize companies that choose not to calculate their own actual emissions in line with the EU's strict reporting and measurement framework," Maleski said. "These defaults could inflate a product's reported emissions intensity by as much as 30%, potentially costing some of our clients millions more starting next year."

From 2027 onward, verifiers would gain flexibility to replace physical site visits with virtual inspections or waive them entirely for installations deemed low-risk, unchanged, and demonstrating strong data integrity.

"I think what people will find challenging is that every installation needs to have an in-person visit from the auditor at least once every two years," said Rozenberg.

"What that means is that unless a company has an actual site visit from an auditor in 2026 to verify that they are collecting and calculating their emissions data correctly, they won't be able to use their emissions factors for trading into the EU, and the importers will have to use default values instead, which will be penalizing," he added.

For installations from which electricity is imported into the customs territory of the EU or used in the production of goods, additional flexibility will be granted for replacing the physical site visit with a virtual site visit, due to the reduced complexity of such verification, according to the regulation.

Benchmarks still missing

This comes as the CBAM-impacted sectors are still waiting for the EC to release provisional CBAM benchmarks in November.

Several sources active in CBAM talks with the Commission told Platts that the CBAM benchmarks will be released to the member states in the coming days before an official announcement later in November.

The benchmark value is a reference value used to calculate the embedded emissions of imported goods and determine the cost of CBAM certificates. It is derived from the average greenhouse gas emissions of the 10% most efficient installations in the EU for that product.

The CBAM benchmarks will be based on the respective EU ETS benchmarks to adequately mirror the bloc's carbon market, and the ETS benchmarks are currently being finalized by the Commission and member states, the sources added.

There are currently 52 ETS benchmarks but there will be around 250-300 CBAM benchmarks because each CBAM product code will have its own value.

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