Simplified CBAM application rules
The European Commission has presented new packages of legislative proposals (Omnibus I and II) aiming to simplify the current EU environmental rules. This will promote a more business-friendly environment allowing European companies to grow, innovate, and create quality new jobs. The proposed changes also affect the carbon border adjustment mechanism (CBAM).
The Commission aims to achieve a reduction in administrative burden of at least 25 percent for businesses and at least 35 percent for small and medium-sized enterprises (SMEs) by the end of its mandate. The Omnibus packages, bringing together proposals in several related legislative areas, significantly simplify ESG financial reporting, sustainability obligations, the EU taxonomy, the Carbon Border Adjustment Mechanism (CBAM), and European investment programmes.
Key changes in the Carbon Border Adjustment Mechanism (CBAM)
As regards CBAM, the exemption of small importers from CBAM obligation is a significant change and will primarily affect SMEs and individuals, in particular those importing small quantities of goods subject to CBAM. The Commission proposes to introduce a new de minimis exemption threshold of 50 tonnes of imported goods per calendar year. According to the Commission’s calculations, this will exempt from the CBAM scheme around 90 percent of operators whose carbon burden represents only 1 percent of the total. Roughly 99 percent of imported emissions would thus remain within the scope of CBAM, falling on the remaining 10 percent of reporting entities.
Other steps proposed within the Omnibus packages is to simplify the authorisation of declarants, the calculation of emissions, and the management of CBAM financial liability. Measures will also be introduced to make CBAM more effective, by strengthening anti-abuse provisions and developing a joint anti-circumvention strategy together with national authorities. In the future, the Commission will also investigate the possibility of extending CBAM to further sectors.
If the Omnibus packages are approved and implemented, we expect the legislative simplifications to take effect from the CBAM definitive period, i.e., 1 January 2026. If you are interested in further information on these changes, please do not hesitate to contact us.