Last month, the EU signed off proposed simplifications to the Carbon Border Adjustment Mechanism (CBAM), as part of their ‘Omnibus’ package. The purpose of this simplification is to reduce the administrative and financial burden for EU businesses, particularly SMEs.
A new minimum threshold for CBAM goods has been introduced, meaning imports up to 50 tonnes per importer per year are no longer subject to the CBAM, only importers exceeding this threshold are now covered by the regulation. This means that 90% of importers of CBAM goods are no longer in scope (mainly SMEs and individuals), whilst 99% of the emissions from these goods are still captured under the legislation.
For those still in scope, an exemption has been applied allowing those still pending CBAM registration at the beginning of 2026 to proceed with their EU imports of CBAM goods without disruption (under several conditions). Finally, the data collection, emissions calculations and financial liability calculations have all been simplified under the legislation.
CBAM Goods initially include various products in the following sectors:
- iron and steel
- aluminium
- cement
- fertilisers
- electricity
- hydrogen
See Annex I and II of Regulation 2023/956 for a full list of CN codes currently in scope of the CBAM. Although initially limited to the most carbon intensive sectors listed above, the EU intents to gradually roll out the CBAM across all product sectors.
Further EU legislative simplifications under the Omnibus package, including CSRD and CSDDD, are set to undergo final voting for approval at the end of October.
