The European Council presidency and European Parliament’s negotiators reached a provisional agreement yesterday on one of the proposals of the so-called ‘Omnibus I’ legislative package: a regulation that simplifies and strengthens the European Union’s (EU) carbon border adjustment mechanism (CBAM).
The CBAM simplification deal is the EU’s instrument to level the playing field in carbon paid for EU products covered by the EU emissions trading system (ETS) with that of imported products, as well as to promote higher climate ambition in non-EU countries.
The proposal aims to offer streamlining and cost-effective compliance enhancements to the CBAM simplification deal without undermining its climate objectives, since some 99 per cent of the embedded emissions in the imported CBAM products would still be covered.
The overall objective is to minimize the regulatory and administrative burden and compliance costs for EU businesses, particularly small and medium-sized enterprises (SMEs), in line with a statement by the Council. The new regulation will also allow for to prevention of any kind of disruption for importers at the start of 2026, when they will be able to keep importing CBAM goods pending CBAM registration.
Co-legislators favored introducing a new de minimis mass threshold, where imports of up to 50 tonnes per importer annually will be exempt from CBAM rules. It supersedes the existing threshold, excluding goods of de minimis value.
The new threshold excludes the vast majority (90 per cent) of importers—largely SMEs and individuals—who only import tiny amounts of CBAM goods.
Co-legislators also concurred in amendments to streamline imports eligible under the CBAM, including the authorisation process, emissions calculation and verification rules, and financial liability of recognised CBAM declarants, while tightening anti-abuse measures.
The agreement is yet to be approved by both the Council and the European Parliament. It will take effect three days following publication in the EU Official Journal.
Early in 2026, the Commission will evaluate whether to expand the application of the CBAM to other ETS sectors and how to assist CBAM products at risk of carbon leakage.
