Managing the risk of CBAM: Hedge CBAM Certificates
As the EU’s Carbon Border Adjustment Mechanism (CBAM) moves into its next phase, importers face a new financial reality. From 2026 onward, companies will need to purchase and surrender CBAM Certificates to cover the carbon emissions associated with their imported goods. One of the issues is that importers can only buy such certificates in 2027. The price? That will be the average of the four quarters of 2026. Indeed, the price of CBAM certificates fluctuates. The issue for many importers, and especially traders, is that they need to know the price they will pay to ensure they have a proper margin. And without hedging the fluctuation of the CBAM certificates, that is going to be a problem.
How CBAM Certificates Work
Under CBAM, companies importing goods into the EU are required to report the embedded emissions of those products. Once verified, these emissions must be matched with CBAM Certificates, which represent a specific amount of CO₂.
Your total emissions determine the number of certificates you need. Each CBAM Certificate must be purchased through the official EU CBAM registry, and its price is linked to the EU Emissions Trading System (EU ETS). This means that certificate prices move in line with carbon market dynamics, sometimes on a daily basis.
At Dubrink, we are seeing growing interest among our clients in understanding how to hedge CBAM Certificates and manage the risk of fluctuating certificate prices. For many, this is not only a compliance issue but also a financial strategy. We have seen companies in the cement industry that hedged their risks many years ago when the price of the ETS, which are 1:1 with CBAM certificates, was not even a third of what they are now. Nobody can predict the prices of CBAM certificates. But the majority of banks predict that they might go to around €250 in 2035.
Why CBAM Costs Fluctuate
The cost of compliance can change due to several factors:
Market shifts in the EU ETS carbon price
Seasonal variations in energy demand and industrial output
Policy updates that influence carbon allowance supply
For businesses with consistent import volumes, this volatility creates uncertainty. A company that imports large quantities of CBAM-covered goods today could see its compliance costs rise significantly next year without any change in emissions.
When Hedging Becomes Relevant
For organizations with annual CBAM emissions above 1,000 tonnes, it becomes worthwhile to consider CBAM hedging strategies. At this scale, even slight price fluctuations can have a significant impact on budgets, forecasts, and competitiveness.
Hedging does not eliminate CBAM obligations, but it could help to stabilize your financial exposure. It is a way of managing risk before certificate prices turn against you.
How Companies Can Hedge CBAM Certificates
There are several practical approaches are emerging in the market, each carrying its own opportunities and trade-offs. The right approach depends on your emission volume, financial goals, and reporting obligations.
How Dubrink Supports You
CBAM is not only about compliance. It is also about smart financial management and strategic foresight. By understanding and hedging your CBAM Certificates, you can protect your margins, stabilize your planning, and stay ahead of market changes.
Dubrink helps you stay compliant and in control.
To be put in contact with the right experts to help you with hedging strategies, contact our team or visit dubrink.com.