The European Commission welcomes the provisional political agreement reached today between the European Parliament and the Council on the Commissions proposal to simplify and strengthen the EUs carbon border adjustment mechanism (CBAM).

On February 26, 2025, the Commission proposed simplifications to the CBAM regulation to reduce administrative burdens for businesses while maintaining the functionality of the CBAM measure. A key aspect of the proposal is a new exemption threshold of 50 tons for CBAM goods. This means that companies that do not exceed a single mass-based threshold set at 50 tonnes of imported goods per importer per year are exempt from CBAM obligations. The proposed measure will primarily apply to SMEs and individuals importing small or negligible quantities of goods covered by the CBAM regulation. As part of the Clean Industrial Deal, it significantly contributes to enhancing the EUs competitiveness and unlocking our full economic potential and investment capacity.

The simplification aims to provide cost-efficient compliance improvements to the CBAM regulation without compromising its climate goals. Approximately 99% of emissions in the imported CBAM goods would still be covered. The overall goal is to reduce the regulatory and administrative burden as well as compliance costs for EU companies, especially SMEs.

Additionally, the proposal includes several simplifications for all importers of CBAM goods above the threshold. This particularly concerns the authorization procedure, data collection processes, calculation of embedded emissions, emission verification rules, calculation of authorized CBAM declarants (parties wishing to import goods subject to CBAM) financial liability during the year of imports into the EU, and claims by authorized CBAM declarants for carbon prices paid in third countries.

Next steps

The European Parliament and the Council must now formally adopt the package before it can enter into force. It will take effect 20 days after its publication in the Official Journal of the EU.

CBAM is currently in its transitional learning phase. Its definitive phase starts on January 1, 2026.

This simplification is a necessary first step before a more comprehensive review of CBAM, which will be carried out later this year, accompanied by a legislative proposal extending CBAM to downstream products and introducing additional anti-circumvention measures. The Commission is also examining how to prevent the risk of export carbon leakage on CBAM products. The CBAM simplification proposal is part of the Commissions “Omnibus I” simplification package, presented on February 26, 2025. Further information is available on the CBAM website and in the Omnibus I and II Q&A.