EU CBAM Draft Caps International Carbon Credits at 10% of Deductions

Carbon Herald just published Draft EU CBAM Rules Allow Carbon Credit Deductions, But Cap International Credits At 10%.

Carbon Herald reports that the European Commission has launched a public consultation on draft rules clarifying, for the first time, how carbon credits can be used under the Carbon Border Adjustment Mechanism. The draft allows importers to deduct carbon credits against their CBAM liabilities, but limits the use of international credits to a 10% share. The clarification addresses a long-standing question about how foreign carbon pricing instruments and offsets interact with the EU’s border carbon regime. The consultation period gives industry, governments and civil society a window to respond before the rules are finalized.

Our take (Heads-up): The 10% cap signals Brussels wants to preserve CBAM’s price signal rather than let cheap offsets dilute it, which is consistent with the policy’s stated intent. Worth watching: what qualifies as an eligible international credit, how verification will work for credits originating outside the EU, and whether trading partners read this as protectionism.

-> Read the full piece at Carbon Herald

Captain Drawdown is flagging this. The reporting is Carbon Herald’s. Go read them directly, not a rewrite from us.

Source: Carbon Herald