The International Tracking Standard Foundation (I-TRACK Foundation) has submitted its response to the European Commission’s latest consultation on the implementation of the Carbon Border Adjustment Mechanism (CBAM). 

The consultation, titled “Call for Evidence for an Impact Assessment – Carbon border adjustment mechanism (CBAM) methodology for the definitive period starting on 1 January 2026,” seeks input on the methodology for calculating embedded emissions in CBAM goods and the treatment of carbon prices paid in third countries. 

In its response, the I-TRACK Foundation emphasized the importance of ensuring that CBAM does not inadvertently discourage the use of renewable energy by producers outside of Europe.  

“As currently proposed, the CBAM threatens the goal of encouraging local renewable energy use in non-European countries. If a CBAM adherent product’s embedded emissions are calculated based on national averages (default values), the CBAM would end up treating producers the same regardless of their efforts to reduce their climate impact by using onsite or offsite renewable energy as a production input…Treating all commodity producers identically by using default values, irrespective of their efforts to reduce the emissions related to their production processes, reduces the incentive to invest in low-carbon technologies in their home countries. This would weaken the ongoing transition to carbon-free commodity production and the development of low-carbon technologies. It would also increase global CO2 emissions by reducing the demand, and revenue, for locally produced renewables and low-carbon technologies.” 

The I-TRACK Foundation also stressed that if emissions are calculated only based on default national averages, producers investing in renewable energy would be penalized by being charged twice: once for procuring renewables and again through default emissions factors. To avoid this, the I-TRACK Foundation has urged the European Commission to: 

• Recognize actual emissions accounting over default values, supported by Power Purchase Agreements (PPAs) and Energy Attribute Certificates (EACs) such as Guarantees of Origin (GOs) and Renewable Energy Certificates like the I-REC(E). 

• Ensure clarity and consistency across EU climate and energy legislation. 

• Work with national governments to define fair and transparent residual mix emission factors. 

• Leverage existing international certification systems to reduce administrative burdens and enhance transparency. 

Through this contribution, the I-TRACK Foundation reaffirms its commitment to supporting the CBAM’s successful implementation while safeguarding incentives for renewable energy use worldwide. 

Download the I-TRACK Foundation’s submission to this consultation using the download button on the top left of this page.