Today, lawmakers from the European Parliament and Council announced an agreement on amendments to the carbon border adjustment mechanism (CBAM), the EU’s carbon tax on imported goods. A new threshold has been introduced exempting 90% of importers, primarily smaller businesses, from CBAM regulations.
Despite removing most companies from the carbon import tax, lawmakers emphasised that the changes would keep the regulation’s impact nearly unchanged, with 99% of emissions from major carbon-intensive industries’ imports, such as iron, steel, aluminium, cement, and fertilisers, still under CBAM’s purview.
Parliament’s rapporteur Antonio Decaro stated: “We have answered calls from companies to simplify and streamline the process and exempted 90% of importers of CBAM goods to facilitate competitiveness and growth for our businesses. As the CBAM will still cover 99% of total CO2 emissions, we have maintained the EU’s environmental ambitions and remain fully committed to a just transition and to achieve climate neutrality by 2050.”
Introduced in 2023 and set to take effect in 2026, CBAM aims to prevent “carbon leakage,” where companies might relocate production of emissions-intensive goods to countries with laxer environmental standards. CBAM seeks to balance the carbon costs for EU products under the EU Emissions Trading System (ETS) with those produced elsewhere. Importers into the EU are required to purchase CBAM certificates to cover the difference in carbon pricing.
The CBAM amendments are part of the European Commission’s Omnibus I package, launched in February 2025, which aims to significantly reduce sustainability reporting and regulatory burdens on businesses. This aligns with the Commission’s “Competitiveness Compass,” targeting a reduction in reporting burdens by at least 25% for all companies and 35% for SMEs, to enhance Europe’s productivity and competitiveness.
The new CBAM agreement introduces a threshold whereby imports up to 50 tonnes per importer per year will not be subject to CBAM rules, replacing a former threshold for goods of negligible value. Parliament and the Council suggest this will primarily exempt SMEs and individuals importing minimal quantities of goods from CBAM compliance requirements.
Besides the new threshold, the agreement includes various simplification measures for CBAM goods importers, addressing the authorisation process, data collection, emissions calculations, verification rules, financial responsibility of authorised CBAM declarants, and reinforcing the regulation’s anti-abuse provisions.
This agreement now awaits final endorsement from both Parliament and Council before it can be implemented.
Adam Szłapka, Minister for the European Union of Poland, remarked: “Today’s provisional agreement with the Parliament is yet another step towards reducing administrative burden for our companies and further boosting EU competitiveness.”
