The European Parliament’s Environment Committee has approved key changes to the Carbon Border Adjustment Mechanism (CBAM) of the EU. The decision is made with the aim of cutting red tape for SMEs while maintaining the system’s environmental rigour. The changes became a part of “Omnibus I” simplification package, introduced in February 2025, for streamlining carbon-related regulations.
The updates exempt 90% of SME importers from CBAM reporting and compliance obligations starting with a definitive regime in 2026, reducing compliance costs, complexity and paperwork.
Let’s explore the updates in CBAM in detail.
About CBAM
The CBAM is a regulatory tool made by the EU to fairly price the carbon emitted during the production of carbon-intensive products that are entering the EU market. It ensures that the carbon pricing of the import is equivalent to the carbon pricing of the domestic production by confirming the price of embedded carbon emissions that are generated in the production of specific products imported into the EU market. CBAM will be a definitive regime starting in 2026, while the current transitional phase will last between 2023 and 2025.
Key updates on CBAM by the EU
- The new update introduces a new de minimis threshold of 50 tonnes. Importers handling less than 50 tonnes of CBAM-covered goods annually are exempt from CBAM reporting requirements. This change exempts about 90% of importers, primarily SMEs and individuals, from administrative obligations, while still ensuring that 99% of carbon emissions from covered imports remain regulated.
- For importers above the 50-tonne threshold, compliance is simplified:
- Easier authorisation process for declarants (those responsible for CBAM reporting).
- Simplified emissions calculation methods.
- Streamlined management of CBAM-related financial liabilities.
- The revised rules include enhanced provisions to prevent circumvention, such as rerouting goods or altering product classifications to evade CBAM obligations.
- The committee limited amendments to the Commission’s specific proposals, avoiding changes to other core CBAM provisions, to maintain stability and prevent carbon leakage.
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