# How fast is EU free allocation phased out under CBAM, year by year?

Canonical: https://senseible.earth/answers/cbam-free-allocation-phase-out-by-year

The CBAM factor that sets how much free allocation is deducted falls from 97.5% in 2026 to 95% in 2027, 90% in 2028, 77.5% in 2029, 51.5% in 2030, 39% in 2031, 26.5% in 2032, 14% in 2033 and zero in 2034. As it falls, more of each tonne is charged.

## CBAM factor by year

- 2026: 97.5%
- 2027: 95.0%
- 2028: 90.0%
- 2029: 77.5%
- 2030: 51.5%
- 2031: 39.0%
- 2032: 26.5%
- 2033: 14.0%
- 2034: 0%

## How it enters the calculation

Certificates owed per tonne equal embedded emissions minus the specific embedded free allocation. With default values, that allocation is the CBAM factor times the cross-sectoral correction factor times the CBAM benchmark for the good.

## Why 2030 is the step to plan for

The factor drops from 77.5% to 51.5% in one year. For a product near its benchmark, the cost per tonne can nearly double between 2029 and 2030 even if nothing at the plant changes.

## What Senseible does here

Senseible reads coal, coke, gas, electricity and freight invoices into a dated, fingerprinted record per site, so an actual figure you send an EU buyer can be traced back to the documents behind it. It does not file CBAM declarations.

- [CBAM calculator](https://senseible.earth/cbam-calculator)
- [CBAM cost for Indian steel](https://senseible.earth/answers/cbam-cost-per-tonne-indian-steel-imports)
- [CBAM benchmarks](https://senseible.earth/answers/cbam-benchmark-values-steel-cement-aluminium)

Sources: [European Commission, Guidance No. 4, calculation of the free allocation adjustment (14 August 2026), Tables 2-1 and 2-2](https://taxation-customs.ec.europa.eu/document/download/3aa2c730-4f1b-4524-8f71-d9cfe4880ac7_en?filename=Guidance%20No.%204%20-%20CBAM%20calculation%20of%20the%20free%20allocation%20adjustment%20to%20the%20number%20of%20CBAM%20certificates%20to%20be%20surrendered.pdf)

Last reviewed 2026-10-23.