The European Council has adopted a new regulation to simplify and strengthen the European Union’s Carbon Border Adjustment Mechanism (CBAM), as part of the ‘Omnibus I’ legislative package.
The reform aims to ease compliance and reduce regulatory burdens, particularly for small and medium-sized enterprises (SMEs), without diluting the climate ambition of the CBAM. Around 99 per cent of embedded emissions in imported CBAM goods will remain covered under the mechanism.
The regulation replaces the existing negligible-value exemption with a new ‘de minimis’ mass threshold, exempting imports of up to 50 tonnes per importer per year. This change is expected to relieve SMEs and individuals importing small quantities of CBAM-covered goods.
To avoid disruptions in early 2026, the amended rules will also allow imports of CBAM goods under specified conditions while importers await CBAM registration.
Additional simplification measures will streamline the authorisation process, emissions data collection, verification requirements, and financial liability calculations for declarants. Adjustments have also been made to rules on penalties and indirect customs representatives.
The regulation will be published in the EU’s Official Journal in the coming days and will enter into force on the third day after publication.
The move follows calls from EU leaders to cut red tape in response to the Enrico Letta report (Much More Than a Market) and Mario Draghi’s review (The Future of European Competitiveness). The Budapest Declaration of November 2024 urged a “simplification revolution” to provide a clear, efficient regulatory framework for businesses.
In February 2025, the European Commission responded with two ‘Omnibus’ legislative packages designed to streamline rules in sustainability and investment, of which the CBAM reform forms a central part.
