The quarterly holding requirement under CBAM obligates every authorized declarant to hold CBAM certificates equal to at least 50% of cumulative embedded emissions from all CBAM imports made since the start of the calendar year, measured at each quarter-end. Regulation (EU) 2025/2083 (the Omnibus amendment) reduced this threshold from the higher rate set in the original regulation, making the interim holding obligation materially lighter while keeping the full-year surrender requirement intact.
Understanding how cumulative calculations work across four quarters is what separates importers who manage their certificate holdings efficiently from those who receive formal shortfall notices from their national competent authority (NCA). This article explains the exact 50% rule, how to calculate your quarterly holding position, and what happens when the threshold is not met.
Caption: The quarterly holding requirement applies cumulatively from January 1 of each calendar year, recalculated at the end of each quarter.
What Is the CBAM Quarterly Holding Requirement?
The quarterly holding requirement is the rule under Article 22(2) of Regulation (EU) 2023/956, as amended by Regulation (EU) 2025/2083, that requires an authorized declarant to hold CBAM certificates in their CBAM Registry account equal to at least 50% of the cumulative embedded emissions of all CBAM goods imported since January 1 of the current calendar year, assessed at the end of each calendar quarter.
Three features define how this rule operates in practice. First, the 50% threshold applies to cumulative emissions, not to a single quarter's imports in isolation. Second, it resets at the start of each calendar year, not at each quarter. Third, the full 100% of embedded emissions must be covered at the annual declaration deadline (September 30), so the quarterly holding rule is an interim compliance checkpoint, not the final obligation.
The EU carbon border adjustment mechanism is a certificate-based system linked to the EU ETS price. The quarterly holding rule exists to ensure that importers build up certificate positions progressively through the year rather than attempting to purchase the entire year's requirement just before the September 30 declaration deadline.
How the 50% Rule Is Calculated Each Quarter
The 50% quarterly holding calculation applies to cumulative embedded emissions from the start of the calendar year to the quarter-end date. The four measurement dates are March 31, June 30, September 30, and December 31.
The formula is straightforward: multiply total cumulative embedded emissions (in tCO₂e) by 0.50 to get the minimum certificate holding required.
Minimum certificates required = cumulative embedded emissions (tCO₂e) × 50%
The table below shows a worked example for a steel importer bringing in blast furnace steel (BF-BOF, emission factor approximately 2.0 tCO₂/tonne) throughout 2027.
| Quarter-end date | Cumulative imports (tonnes steel) | Cumulative embedded emissions (tCO₂e) | Minimum certificates required (50%) | Actual certificates held | Compliant? |
|---|---|---|---|---|---|
| March 31, 2027 | 500 | 1,000 | 500 | 520 | Yes |
| June 30, 2027 | 1,200 | 2,400 | 1,200 | 1,250 | Yes |
| September 30, 2027 | 1,900 | 3,800 | 1,900 | 1,850 | No — shortfall of 50 |
| December 31, 2027 | 2,500 | 5,000 | 2,500 | 2,600 | Yes |
In this example, the importer falls short at Q3 end by 50 certificates. The NCA issues a formal notice. The importer then has a defined period to bring the holding into compliance. The full 5,000 certificates must be surrendered by September 30, 2028 (the declaration deadline for 2027 imports).
Why the Omnibus Changed the Threshold from the Original Rate
The original Regulation (EU) 2023/956 set the quarterly holding threshold at a higher rate. Regulation (EU) 2025/2083 reduced this to 50% as part of a broader set of simplification measures. The change reflects two operational realities that emerged during the 2023–2025 transitional period.
First, CBAM certificate sales do not begin until February 1, 2027. Importers accumulating obligations throughout 2026 cannot purchase certificates to cover those obligations until early 2027. The quarterly holding rule therefore applies from 2027 onward when certificates are actually available for purchase.
Second, the Commission acknowledged that the original threshold created disproportionate liquidity pressure on importers with volatile or seasonal import volumes. A steel importer who front-loads 70% of annual purchases in Q1 would face a heavy certificate purchase burden in Q1 under a high threshold, even if their full-year position was sound. The 50% rule allows a more even distribution of certificate purchases across the year.
The 50% threshold is now paired with a buyback provision: authorized declarants can sell back up to 50% of certificates purchased in a given year at the original purchase price, with a buyback deadline of October 31 of the surrender year (Article 23, as amended). This combination gives importers a meaningful hedge against over-purchasing.
What Happens If You Fall Short of the 50% Quarterly Holding
A shortfall in the quarterly holding requirement triggers a formal NCA notice under Article 22(2). The notice specifies the number of certificates needed to restore compliance and gives the authorized declarant a period to remedy the position.
The consequences of falling short follow a defined sequence. The four steps are listed below in order of escalation.
- NCA formal notice: The competent authority of your member state identifies the shortfall by comparing your registry account holdings against the import data received from customs authorities. The notice is issued to the authorized declarant.
- Remediation period: The declarant must purchase and transfer the required additional CBAM certificates to their registry account within the period specified in the notice.
- Penalty exposure: Failure to remedy after the notice creates exposure to the standard penalty of €100 per tonne CO₂e not covered (Article 26(1), as amended by Regulation (EU) 2025/2083). This penalty rate applies to the shortfall amount, not to the entire annual obligation.
- Authorization review: Repeated or material quarterly holding failures are a compliance factor that the NCA considers when reviewing an authorized declarant's authorization status.
The €100/tCO₂e penalty rate is fixed, not a range. This is one of the consistency points in Regulation (EU) 2025/2083: the earlier formulation allowed national variation; the Omnibus harmonized it across all 27 member states.
How CBAM Certificates Are Priced for the Quarterly Holding
The price at which authorized declarants purchase CBAM certificates to meet the quarterly holding requirement depends on the year of import.
For 2026 imports, the certificate price is the quarterly average of EU ETS auction clearing prices during each quarter of importation (Article 22(1a), inserted by Regulation (EU) 2025/2083). Importers purchasing certificates in early 2027 will know the 2026 quarterly prices before they buy, removing forward price uncertainty for the first year.
For 2027 and subsequent imports, the certificate price is the weekly average of EU ETS auction closing prices (Article 22(1)). As of late March 2026, the EU ETS price stands at approximately €70 per tonne CO₂ (Q1 2026 range: €66–90), though this figure fluctuates daily and should be treated as a directional reference.
CBAM certificates have no secondary market. They can only be purchased from and sold back to the national competent authority. No exchange trading or bilateral transactions between importers are permitted. This structure means the certificate price is always the current ETS-linked price and importers cannot build strategic certificate inventories by purchasing on dips in a secondary market.
Quarterly Holding in Context: The Full CBAM Certificate Lifecycle
The quarterly holding requirement sits at one step in a six-stage certificate lifecycle that every authorized declarant manages each year. Understanding where quarterly holding fits helps clarify what it does and does not require.
The six stages in the certificate lifecycle are listed below in calendar order.
- Import and classify: Record cumulative embedded emissions for each CBAM goods shipment throughout the year (January 1 onward).
- Monitor quarterly position: At each quarter-end (March 31, June 30, September 30, December 31), confirm that certificate holdings in the CBAM Registry account meet or exceed 50% of cumulative embedded emissions.
- Purchase certificates: Buy CBAM certificates from the NCA via the Common Central Platform (available from February 1, 2027). Purchases can be made at any point during the year.
- Apply Article 9 deductions: If the non-EU producer has effectively paid a qualifying carbon price in their country of origin, calculate the proportional deduction to reduce the number of certificates required.
- Submit annual declaration and surrender: File the CBAM declaration by September 30, surrendering certificates equal to 100% of verified net embedded emissions for the full calendar year.
- Buyback excess certificates: If certificates held exceed the surrender requirement, sell back up to 50% of that year's purchases by October 31 at the original purchase price.
The quarterly holding requirement applies specifically at stage two. Meeting the 50% threshold at each of the four quarter-end dates is a compliance obligation distinct from the annual surrender. Missing a quarterly holding check while ultimately surrendering the correct full-year quantity does not eliminate the penalty exposure for the quarterly shortfall.
Caption: Certificate purchases can be spread across the year, but the 50% holding check applies at each quarter-end.
How Quarterly Holding Interacts with the Free Allocation Adjustment
The quarterly holding calculation uses gross embedded emissions before the free allocation adjustment (SEFA). The SEFA reduction applies at the annual declaration stage, not at the quarterly check.
This distinction matters because the CBAM factor in 2026 is only 2.5% (97.5% of free allocation remains). At the annual declaration, an importer's net certificate obligation for 2026 is dramatically smaller than the gross embedded emissions figure. However, the quarterly holding check during 2027 (when 2026 imports are declared) still references the gross cumulative figure at 50%.
The practical effect is small in 2026 given the low CBAM factor, but grows as free allocation phases out. By 2030, when the CBAM factor reaches 48.5%, the quarterly holding obligation on a gross basis represents a substantial certificate purchase commitment.
Quarterly Holding Compliance: A Practical Approach
Managing the quarterly holding requirement efficiently centers on four operational practices. Authorized declarants with robust compliance programs implement all four from the start of each calendar year.
The four practices are described below.
- Track cumulative embedded emissions monthly, not quarterly. Waiting until quarter-end to calculate the cumulative position creates a compressed purchase window. Importers who track monthly have 2–3 months to purchase certificates before each quarter-end check.
- Use the buyback provision as a buffer, not a strategy. The 50% buyback limit (Article 23) provides a hedge for over-purchases, but treating the buyback as a primary tool adds unnecessary transaction friction. Purchase conservatively above the 50% minimum and use buyback only for genuine over-estimation.
- Align certificate purchases with import seasonality. Importers with front-loaded Q1 volumes need more certificates earlier in the year. Importers with back-loaded Q4 volumes have more time, but must still meet the December 31 quarterly check with sufficient holdings for the full year's cumulative emissions at 50%.
- Confirm registry account access before the first purchase window opens. Certificate sales begin February 1, 2027. Authorization and registry account setup must be complete before that date. The authorization application deadline is March 31, 2026, but processing takes up to 120 days, meaning applications submitted close to that deadline may not be authorized until late July 2026.
For comprehensive guidance on the full authorization process and all related importer obligations, see CBAM compliance for importers.
Contextual Border: Quarterly Holding and the Annual CBAM Declaration
The quarterly holding requirement and the annual CBAM declaration operate on different timescales but converge at September 30. The September 30 quarter-end date is both the Q3 quarterly holding check date and the annual declaration deadline.
At September 30, the authorized declarant must simultaneously hold certificates covering at least 50% of cumulative Q1–Q3 embedded emissions (the quarterly holding check for Q3) and, for the annual declaration covering the prior year, surrender certificates equal to 100% of verified net embedded emissions for the full prior calendar year.
For example, by September 30, 2028, an importer must complete two simultaneous obligations: surrender certificates for the full 2027 import year (the annual declaration), and confirm that their holdings for Q1–Q3 2028 imports meet the 50% quarterly threshold.
What Is the Difference Between the Quarterly Holding and the Annual Surrender?
The quarterly holding requirement is an interim compliance checkpoint requiring certificates equal to at least 50% of cumulative year-to-date embedded emissions at each quarter-end. The annual surrender is the final obligation requiring certificates equal to 100% of verified net embedded emissions for the full calendar year, filed via the CBAM declaration by September 30 of the following year.
The quarterly check ensures progressive compliance. The annual surrender is the definitive discharge of the financial obligation.
Does the Quarterly Holding Apply in 2026?
The quarterly holding requirement does not apply in 2026 in practice, because CBAM certificate sales do not begin until February 1, 2027. Importers accumulate embedded emission obligations throughout 2026 but cannot purchase certificates to satisfy a quarterly holding check until 2027. The first active quarterly holding checks occur during 2027 against 2027 import activity.
The 2026 import year obligations are fully discharged through the first annual declaration, due September 30, 2027.
Can You Use the Buyback to Manage Quarterly Holding Risk?
The buyback provision (Article 23) allows authorized declarants to sell back up to 50% of certificates purchased in a given calendar year at the original purchase price, by October 31 of the surrender year. The buyback applies to annual certificate management and does not retroactively cure a quarterly holding shortfall that has already been identified by the NCA. Purchasing more certificates than the minimum 50% requirement, then buying back excess after the declaration, is a legitimate planning approach but does not eliminate penalty exposure for a confirmed Q3 or Q4 shortfall.
What Is the Penalty for Missing the Quarterly Holding Requirement?
The penalty for failing to hold sufficient CBAM certificates after receiving a formal NCA notice is €100 per tonne CO₂e not covered (Article 26(1) of Regulation (EU) 2023/956, as amended by Regulation (EU) 2025/2083). The penalty applies to the shortfall amount. See the CBAM penalties guide for the full penalty framework, including the €300–500/tCO₂e rate for unauthorized importers.
Is the Quarterly Holding Requirement Part of the CBAM Compliance Checklist?
Monitoring the quarterly holding position is one of the 11 ongoing compliance actions in the CBAM importer workflow. The CBAM compliance checklist covers all 11 steps, including the quarterly holding check as a recurring calendar obligation at each quarter-end.