Carbon Border Adjustment Mechanism (CBAM)

Date of Adoption:
10-May-23

Omnibus Packages
On 26 February 2025, the European Commission adopted the Omnibus packages, targeting the CSDDD, CSRD, Taxonomy, and CBAM, with a focus on reducing the complexity of EU requirements for all businesses, especially SMEs and small mid-caps (SMCs).

CBAM applies to imports of cement, electricity, fertilisers, iron and steel, aluminium, and certain chemicals, except consignments under €150. Electricity generated in the EEZ of EU Member States is treated as EU origin and excluded from CBAM.

In addition, a full review of CBAM will take place in 2025, with possible extension to other Emissions Trading System (ETS) sectors, downstream goods, and indirect emissions. A legislative proposal is expected in early 2026.

Key changes expected for this regulation (CBAM):

• Exemption for small importers:
  Importers of less than 50 tonnes of CBAM goods per year (≈80 tonnes CO₂e) will no longer have CBAM obligations. This spares many SMEs and individuals.
• Simplified compliance:
  Procedures for authorisation of declarants, emissions calculation, and reporting will be streamlined to reduce administrative burden.
• Reduced reporting burden:
  The changes will spare 90% of companies from reporting obligations, while still covering 99% of CO₂ emissions entering the EU.
• Stronger enforcement:
  The EU will tighten controls and work with national authorities to stop companies from finding loopholes or avoiding CBAM rules.