We break down the proposed changes to CBAM, designed to simplify and cut red tape, strengthening the competitiveness of EU businesses.
Why Simplify Rules?
The EU aims to simplify rules, reduce administrative burdens, boost competitiveness, and unlock investment capacity to support business growth, innovation, and job creation, while aligning climate and competitiveness goals to mobilise €50 billion in investment and reduce costs by €6.3 billion annually. It plans to reduce administrative burdens by 25%, and 35% for SMEs, through 'Omnibus' packages that simplify areas like sustainable finance reporting, due diligence, the EU Taxonomy, the carbon border adjustment mechanism, and investment programmes, focusing on larger companies but still enabling all businesses, especially SMEs and small mid-caps, to access sustainable finance for their clean transition.
Why Simplify CBAM?
The EU's Carbon Border Adjustment Mechanism (CBAM) plays a critical role in the fight against carbon leakage, ensuring fair competition for European industries. However, to streamline its implementation and improve business compliance, the EU has proposed several key changes. These adjustments are designed to simplify processes and make it easier for importers to navigate the system.
"I'm thrilled to see Europe's dedication to streamlining business operations! By simplifying CBAM, the EU is giving companies the tools they need to reduce carbon emissions while keeping their competitive edge. It's fantastic that about 90% of companies are exempt from CBAM reporting, yet over 99% of emissions are still covered. This is an exciting first step in a comprehensive review of CBAM! Bring on more simplification!" – Arne Mielken, Managing Director Customs Manager Ltd
What will be simplified in a nutshell?
The EU plans to streamline CBAM by exempting small importers, primarily SMEs, with a new annual threshold of 50 tonnes, thereby eliminating obligations for about 90% of importers while still accounting for over 99% of emissions. It also simplifies regulations for the remaining companies impacted by CBAM, including the calculation of embedded emissions and reporting requirements, and enhances measures to prevent evasion. This simplification paves the way for expanding CBAM to other sectors and goods in 2026.
Downloads For Your Work
Let's delve deeper and examine the 15 most significant changes to CBAM that will greatly reduce your compliance efforts.
Key Simplifications We Will Cover Below
Exemption for minimal amounts (De Minimis)
Definition of importer
Authorization for imports under minimal thresholds
Deduction of carbon pricing
Delegated reporting process
Deadline for reporting
Calculation of emissions (aluminum & steel)
Requirement for verification
Default values
Commencement date for CBAM certificate purchase
Ratio of CBAM certificates
Repurchase of CBAM certificates
Penalties for unauthorized importers
Factors for penalty reduction
Calculation of electricity emissions
Let’s take a look at the current provisions, the proposed changes, and the rationale behind these adjustments.
We cover CBAM!
Read the Customs Watch EU & UK
The Customs Watch consolidates information from multiple sources into one document. Businesses can scan the publication once a week to get the latest updates. Businesses can build their knowledge and establish themselves as thought leaders in the field. Businesses can make informed decisions, mitigate risks, and enhance their compliance strategies.
What does The Customs Watch EU & UK cover?
EU and UK changes
CBAM & EUDR changes
Classification decisions
Classification guide updates
CDS releases
Advice, guidance, and thought leadership
How to access The EU & UK Customs Watch?
The Customs Watch is a weekly publication that can be accessed on www.Customs Manager.Info.