CBAM certificates connect the emissions embedded in covered EU imports with the mechanism’s financial obligation. The European Commission informs why importers need to plan purchases, monitor their position and prepare for annual surrender rather than treat certificates as a last-minute transaction.
For Malaysian exporters, the purchasing obligation normally sits with the authorised EU CBAM declarant. However, the emissions information supplied by producers forms part of the basis for the customer’s calculation. Understanding the process helps suppliers have more informed conversations about data, pricing and commercial responsibilities.
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What are certificates used for?
The authorised declarant must surrender the required number of certificates to meet its annual CBAM obligation. The calculation starts with embedded emissions and takes account of applicable adjustments, including the adjustment reflecting EU ETS free allocation and eligible carbon prices effectively paid in a third country. It is not simply a flat charge per tonne of imported product.
A commercial estimate should therefore distinguish product quantity, embedded emissions, the certificate requirement after applicable adjustments, and the relevant certificate price. This helps avoid presenting a rough estimate as a final compliance amount.
The first compliance cycle: 2026 imports, 2027 purchases
Sales of CBAM certificates start on 1 February 2027. The first annual declaration and corresponding certificate surrender are due by 30 September 2027, covering goods imported in 2026. Importers therefore purchase certificates retrospectively for that first import year.
For a supplier preparing emissions information, the important consequence is timing: records supporting the customer’s 2026 import-year declaration must be assembled before the 2027 submission. A later purchase date does not make 2026 data irrelevant.
How certificate prices are determined
Certificate prices follow EU Emissions Trading System allowance auction prices. The Commission calculates and publishes quarterly prices for 2026 and weekly prices from 2027 onwards. For 2026 imports, the quarterly price corresponding to the quarter of importation applies, even though the certificates are purchased in 2027.
This distinction matters when reviewing customer estimates. A business should not automatically apply a current weekly price to all goods imported in 2026. The import period and the applicable pricing basis must be identified first.
Quarterly holdings: a separate obligation from annual surrender
From 2027, the rules require authorised declarants to maintain a minimum certificate position at each quarter-end. In general terms, that position must correspond to at least 50% of the embedded emissions in goods imported since the beginning of the year, subject to the applicable calculation rules and threshold provisions.
The quarterly holding requirement does not apply retrospectively to 2026 imports. A declarant in 2027 must therefore manage two related but distinct tasks: settle the annual obligation for 2026 and maintain the required quarterly position for 2027 imports.
Holding certificates during the year is not the same as surrendering them for the final annual obligation. Keeping separate tracking schedules for the two tasks is a useful internal control.
What happens if too many certificates are purchased?
The Commission describes a repurchase mechanism for surplus certificates and identifies 31 October as the annual request deadline after surrender. This is a regulated mechanism, not an unrestricted right to trade certificates with other businesses.
The amount eligible for repurchase and the treatment of particular certificates must be checked against the applicable rules. Declarants should reconcile holdings after surrender, identify eligible surplus and submit any request within the relevant deadline rather than assume that every unused certificate will be refunded automatically.
What Malaysian exporters should discuss with EU customers
- Data basis: which actual or default emissions values are being used?
- Import periods: which calendar year and, where relevant, quarter does the estimate concern?
- Calculation assumptions: have applicable adjustments been assessed rather than omitted?
- Commercial arrangements: how will estimated CBAM-related costs be addressed in quotations and contracts?
- Updates: when should revised emissions information be supplied and reviewed?
Plan for information quality as well as cash flow
The EU declarant must manage certificate purchases and surrender, but a Malaysian producer can support that process through timely, consistent information. For both parties, the best preparation is to separate the legal calculation from commercial negotiation and ensure that assumptions are visible before costs are allocated.
Turn CBAM awareness into action
Understanding CBAM is the starting point. The next step is to consider what it means for your business and identify the areas that need attention, from customer expectations to internal coordination.
Speak with Bernard Business Consulting Sdn. Bhd. about your current position and preparation priorities. Contact us to discuss your questions and explore a practical way forward.
