Page Contents
Related areas
Key contacts
On 26 February 2025, the European Commission (Commission) published the eagerly awaited omnibus package on sustainability. This package contains proposals to simplify, among other existing legislation, CBAM by way of an amending Regulation.
The proposed simplifications reflect the insights gathered during CBAM’s transitional period, which is ongoing since October 2023. It is important to note that the publication of the proposal is only the start of the EU’s legislative process with amendments likely before the final text is agreed by the European Parliament and Council.
Exempting small importers
The Commission considers that the current threshold for CBAM reporting is not fit for the purpose of maximising the CBAM’s effectiveness to safeguard against carbon leakage while minimising its administrative burden. Experience gathered during the transitional period shows that, for importers who import small quantities of CBAM goods representing very small quantities of embedded emissions, compliance with CBAM is administratively burdensome. The burden is especially onerous for small and medium-sized enterprises (SMEs), individuals and occasional importers.
One key element of the CBAM simplification package is, therefore, a new cumulative annual threshold of 50 tonnes per importer across four CBAM sectors (iron and steel, aluminium, cement, fertilisers). This would exempt approximately 182,000 or 90% of importers from CBAM obligations, while ensuring that the limited number of large importers that account for 99% of embedded emissions remain in scope.
Under this proposal, exempt importers would simply need to self-identify as “occasional CBAM importers” when lodging an import declaration for a CBAM good. These importers would self-monitor the volume of their imports and, if they expected to exceed the threshold, could apply to become an authorised CBAM declarant. The Commission considers that this proposed simplification would bring certainty, less administration and cost savings for small importers, while allowing authorities to focus on ensuring compliance by a limited number of large importers.
Simplifying the rules for large importers
In addition to seeking to exempt those importers that fall below the annual threshold, it is proposed to introduce simplification measures to benefit the importers that will remain within the scope of CBAM. There are four categories of proposed measures to simplify:
The authorisation of declarants
The proposals include allowing authorised CBAM declarants to delegate the submission of the CBAM declaration to a third party with technical expertise (for example, consultants and/or environmental experts). To obtain access to the CBAM registry, the third party should hold an Economic Operators Registration and Identification (EORI) number and fulfil certain other criteria and follow procedures which would be established in an implementing act. Authorised CBAM declarants would remain legally responsible of their CBAM obligations.
The calculation of embedded emissions
There are various measures proposed to simplify emissions calculation, including:
CBAM reporting requirements
One proposed measure to simplify CBAM reporting requirements would change the deadline for importers to submit their annual CBAM declaration and surrender the corresponding certificates, aiming to provide declarants with more time to collect the necessary data, ensure that embedded emissions are verified by an accredited verifier and purchase the corresponding number of CBAM certificates. Another proposed simplification relates to improving the access of third-country operators to the CBAM Registry and creating access for accredited verifiers.
The management of CBAM financial liability
The measures proposed to CBAM financial liability include:
Making CBAM more effective
Finally, it is proposed that CBAM will provide for a more robust monitoring system, where Commission and the national competent authorities for CBAM are jointly responsible for detecting importers who seek to avoid CBAM obligations. Authorities would have extended enforcement powers to tackle non-compliance and circumvention activities, for example schemes whereby importers may artificially split their imports across separate entities with different EORI numbers.
Next steps
The amendments proposed to CBAM will now be considered by the European Parliament and the Council. This proposed simplification is the precursor to a full review of CBAM later this year. The Commission is due to present a comprehensive CBAM review report in the second half of 2025. The report will deal with:
Companies should consider the impact that these proposed amendments may have on their existing CBAM obligations and monitor the developments as these proposals work their way through the EU’s legislative process.
In November 2024, we published an article providing a brief overview of the key features of CBAM which may serve as a helpful reminder of the objectives of CBAM and the existing requirements.
With thanks to Erin Ward for her assistance in the preparation of this article.
For further information on these developments, please contact Jill Shaw, ESG & Sustainability Lead or any other member of the ALG ESG & Sustainability team.
Date published: 26 March 2025