The European Parliament and the Council of the European Union have reached a political agreement on a significant revision of the EU’s Carbon Border Adjustment Mechanism (CBAM). The reforms, part of the broader “Omnibus I” simplification package, are aimed at reducing the administrative burden on smaller market players while safeguarding the climate integrity of the mechanism.
New Threshold to Reduce Burden on Small Importers
A central element of the reform is the introduction of a de minimis threshold of 50 tonnes of covered goods per importer per year. Under the new rule, companies importing below this threshold will be exempt from the CBAM requirements. This move is expected to relieve approximately 90% of importers, particularly small and medium-sized enterprises (SMEs) and occasional importers, from complex reporting and compliance obligations.
Previously, CBAM exempted only products deemed to be of negligible economic value. The new, volume-based threshold marks a shift toward a more practical and impactful simplification approach.
Climate Integrity Maintained
Despite the exemption for a large number of smaller importers, the climate ambition of CBAM remains fully intact. According to the agreement, 99% of CO₂ emissions embedded in imports of iron, steel, aluminium, cement, and fertilisers will still be covered by the mechanism. The co-legislators included safeguards in the legal text to ensure this level of coverage is maintained and that the new threshold does not lead to systemic circumvention or fragmentation of the instrument.
Simplified Procedures for Covered Importers
In addition to the threshold change, the agreement introduces a series of procedural simplifications for companies that remain subject to CBAM. These include:
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Streamlining the authorisation process for CBAM declarants.
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Improving emission calculation methods, particularly for complex imports.
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Clarifying and easing verification procedures.
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Strengthening the framework for financial liability of authorised CBAM declarants.
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Reinforcing anti-fraud provisions, to address potential misuse of exemptions and to ensure compliance.
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These updates are designed to improve the predictability, efficiency, and enforceability of CBAM while promoting regulatory clarity for all stakeholders involved in cross-border carbon-intensive trade.
Political Statement
Commenting on the agreement, Antonio Decaro (S&D, Italy), the European Parliament’s rapporteur on the file, stated:
“The CBAM is a cornerstone of the EU’s climate policy architecture. It protects European industries such as cement, steel, aluminium, fertilisers, electricity, and hydrogen from unfair competition while promoting global decarbonisation. With this agreement, we are responding to the calls from businesses for simplification and greater efficiency. By exempting 90% of importers — mainly SMEs — we are supporting growth and competitiveness without compromising our environmental goals. With 99% of CO₂ emissions still covered, the EU retains its leadership on climate ambition and the path to climate neutrality by 2050.”
Next Steps
The political agreement reached today will need to be formally approved by both the European Parliament and the Council in the coming weeks. Once adopted, the revised rules will enter into force three days after publication in the Official Journal of the European Union.