CBAM: EU Commission proposes simplifications
As part of the so-called Omnibus Initiative, the European Commission has adopted the first packages of proposals on 26 February 2025 to simplify EU rules and boost competitiveness. This also includes changes to the Carbon Border Adjustment Mechanism.
As stated in the Commission's press release, the Omnibus Initiative aims to create more favourable conditions for businesses in the EU to promote their growth and innovation capacity. The primary focus in on implementing measures to reduce the administrative burden on companies. Especially for SME’s this burden shall be reduced by at least 35 % by the end of the Commission's term.
Which regulations are affected?
In addition to proposals for simplifying sustainability reporting (CSRD) and the European Supply Chain Due Diligence Act (CSDDD), the first Omnibus packages presented on 26 February 2025 also include measures to simplify the Carbon Border Adjustment Mechanism (CBAM) and make it more effective.
Overview of the CBAM changes
The proposed simplifications of CBAM will abolish the existing obligations for 90 % of the affected companies, mostly SMEs. At the same time, around 99 % of emissions will still fall in the CBAM scope. The main changes are:
- De-minimis threshold exemption: Small importers, mostly SMEs and individuals, are to be exempted from obligations by introducing a new de-minimis threshold exemption of 50 tonnes mass.
- Bureaucratic relief: Companies that remain in the scope of the regulations are to be relieved. This includes simplifying the authorization of declarants and the regulations related to relevant obligations. This also includes the calculation of grey emissions and reporting obligations.
- Improvement of CBAM effectiveness: By strengthening anti-abuse provisions, the long-term efficiency of CBAM is also to be ensured.
What happens next?
The legislative proposals will now be submitted to the European Parliament and the Council. Once the two institutions have agreed, the changes will enter into force after publication in the EU Official Journal.
In addition, the EU Commission intends to conduct a full review of CBAM and its extension to other sectors covered by emissions trading and downstream goods by the end of 2025. In this context, it will also be analysed how exporters of CBAM products at risk of carbon leakage can be supported. A legislative proposal on this is to follow in early 2026.