The European Commission (EC) has set the price of Carbon Border Adjustment Mechanism (CBAM) certificates at €75.36 (~$88.03) per metric ton of carbon equivalents for the first quarter (Q1) of 2026.

The CBAM prices are determined based on the average price of the EU Emissions Trading System.

The certificate prices reflect what importers will pay for the greenhouse gas emissions embedded in iron and steel, cement, aluminum, fertilizers, hydrogen, and electricity-linked products, aligning their costs with those of producers in the European Union (EU) and preventing cheaper, high-emission imports from gaining an unfair advantage.

The EC will publish CBAM certificate prices for all quarters of the year, with the Q2 price expected on July 6, 2026. CBAM prices from 2027 onwards will be published weekly.

To cover emissions embedded in products during 2026, importers in Europe must purchase CBAM certificates from the EC’s central platform starting in February 2027 to cover emissions embedded in goods imported during 2026.

The EU began implementing the definitive phase of CBAM from this January. It clarified that the CBAM emissions costs will not only be incurred at the project/plant stage but also across the entire supply chain. Many production stages use electricity, which can be decarbonized more quickly with renewable energy. Companies can cut emissions by using green power, improving efficiency, and electrifying equipment.

Introduced in 2023, CBAM aims to incentivize non-EU countries to enhance their climate goals and ensure the region’s efforts are not undermined by production being relocated to countries with less competitive policies.

India had opposed CBAM as a trade-restrictive measure that shifts climate burdens onto developing economies. But for companies exporting to Europe, the near-term reality is simpler. If you want to sell to the European market, you must operate under the EU’s rulebook.

However, last September, the EU agreed to deduct the carbon price paid by exporters in India from the price they would have to pay under CBAM.

Last September, the European Solar Manufacturing Council recommended to the Commission that solar products be brought under the CBAM’s ambit, as they rely heavily on carbon-intensive materials such as aluminum and steel, which are already covered by the adjustment mechanism.