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The European Commission has opened a public consultation on draft rules clarifying for the first time how carbon…
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] Draft EU CBAM Rules Allow Carbon Credit Deductions, But Cap International Credits At 10% – Carbon Herald RemovalDirect Air CaptureBiomassBECCSMineralizationOceanFarmingPolicyCaptureEnergyFuelsStorageUtilizationPolicyMarketsETSVoluntaryComplianceArticle 6InsuranceCarbon AccountingOpinionNewsletterAdvertisingArchives Archives Select Month May 2026 (65) April 2026 (128) March 2026 (114) February 2026 (119) January 2026 (115) December 2025 (104) November 2025 (149) October 2025 (133) September 2025 (131) August 2025 (111) July 2025 (131) June 2025 (135) May 2025 (142) April 2025 (122) March 2025 (126) February 2025 (128) January 2025 (143) December 2024 (130) November 2024 (170) October 2024 (165) September 2024 (175) August 2024 (148) July 2024 (159) June 2024 (155) May 2024 (179) April 2024 (165) March 2024 (176) February 2024 (153) January 2024 (139) December 2023 (136) November 2023 (169) October 2023 (179) September 2023 (169) August 2023 (144) July 2023 (146) June 2023 (130) May 2023 (112) April 2023 (132) March 2023 (169) February 2023 (123) January 2023 (103) December 2022 (97) November 2022 (128) October 2022 (118) September 2022 (109) August 2022 (64) July 2022 (90) June 2022 (90) May 2022 (92) April 2022 (83) March 2022 (85) February 2022 (74) January 2022 (73) December 2021 (53) November 2021 (95) October 2021 (84) September 2021 (75) August 2021 (60) July 2021 (48) June 2021 (69) May 2021 (36) April 2021 (34) March 2021 (48) WingsWingsSelect CategoryAfforestation/Reforestation (ARR)Article 6BECCSBiomassBlue CarbonCaptureCarbon AccountingCarbon Capture StocksCompaniesComplianceCookstovesDirect Air CaptureDirect Air CaptureEnergyETSFarmingForestsFuelsHydrogenHydrogen StocksInsuranceInterviewsInvestmentMarketsMineralizationOceanOpinionPartner ContentPolicyPolicyPolicyPress ReleasePricesREED/REDD+RemovalScienceStartupsStocksStorageTechnologyUncategorizedUtilizationVoluntary MetaLog inEntries feedComments feedWordPress.org RemovalDirect Air CaptureBiomassBECCSMineralizationOceanFarmingPolicyCaptureEnergyFuelsStorageUtilizationPolicyMarketsETSVoluntaryComplianceArticle 6InsuranceCarbon AccountingOpinionNewsletterAdvertising Latest New Alberta Carbon Market Deal Could Clear Path For Pacific Oil Export Route Varaha & SAF Bangladesh Mark The Country’s First Agroforestry Credits Issued Under Verra’s Verified Carbon Standard Alberta Commits $50M To Industrial Decarbonization And Cleantech Projects Wren Kicks Off Its 2026 Call For Proposals, Looking To Back Climate Solutions агреена Zurich Insurance Group zurich insurance Article 6MarketsPolicyDraft EU CBAM Rules Allow Carbon Credit Deductions, But Cap International Credits At 10%byTheodora StankovaMay 15, 20262 minute read Image source: ALEXANDRE LALLEMAND via UnsplashTotal0Shares 0 0 0 0 0 The European Commission has opened a public consultation on draft rules clarifying for the first time how carbon prices paid outside the European Union will reduce importers’ obligations under the Carbon Border Adjustment Mechanism (CBAM) in an attempt to balance market access with safeguards against low-quality offsets gaming the system.The proposal, published May 13 and open for feedback until June 10, would allow importers of carbon-intensive goods to reduce CBAM liabilities using certain credits issued under Article 6 of the Paris Agreement. The credits would be capped at 10% of emissions from facilities producing goods exported into the EU.Under the draft implementing regulation, domestic carbon costs—whether paid under a third country’s emissions trading system (ETS) or carbon tax—will be fully deductible with no additional EU quality requirements.Internationally Transferred Mitigation Outcomes (ITMOs) authorized under Articles 6.2 and 6.4 of the Paris Agreement will also be accepted, but capped at 10% of reported embedded emissions to limit the risk of low-integrity credits reducing import carbon costs.The Commission said the restriction was intended to preserve environmental credibility and avoid excessive reliance on offsets. “This criterion should promote the development of Article 6 credits,” as per the draft regulation.The move represents a departure from the European Parliament’s earlier position, which removed provisions recognizing international credits from draft CBAM legislation amid concerns over market integrity.According to Trade Finance Global (TFG), the 10% cap on ITMOs reflects longstanding concerns about phantom credits. An analysis of nearly one billion tonnes of previously issued carbon credits found that fewer than 16% represented genuine emissions reductions, giving Brussels reason for caution.Relevant: EU Sets Carbon Border Price Framework, Pegging Imports To ETS MarketNick Ogilvie, CBAM Product Manager at CarbonChain, said the headline benefit for third-country suppliers is clarity. “They now know exactly how a domestic carbon price converts into a CBAM deduction, including how free allowances, rebates, and indirect cost compensation get netted off,” he was quoted as saying by TFG.The Commission has previously refined CBAM substantially through consultation, including simplifications adopted in October 2025, though implementing acts are limited to technical rather than fundamental changes.The consultation forms part of the EU’s broader effort to finalize operational rules for CBAM, whose definitive phase began in January 2026.Read more: EU Carbon Border Adjustment Mechanism Goes Live, Raising Trade Stakes 0 0 0 CBAMeuinternational carbon creditsSubscribe to Our Weekly Newsletter Get the Latest News About the Carbon Industry Subscribe By checking this box, you confirm that you have read and are agreeing to our terms of use regarding the storage of the data submitted through this form. 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