EU Omnibus Package: Key Changes Proposed by the Commission on the Carbon Border Adjustment Mechanism

As part of the Omnibus package, the European Commission (Commission) published a Proposal for a regulation (Proposal) to simplify and strengthen the EU Carbon Border Adjustment Mechanism (CBAM). The Proposal seeks to introduce two main simplifications: (i) exemption of importers of small quantities of certain CBAM goods from the scope of CBAM and (ii) simplifications for importers that remain in scope.

Timeline for adoption

The Commission’s Proposal launches the ordinary EU legislative process. The Proposal will ultimately be adopted by the Council of the European Union and the European Parliament. Each of these institutions will now propose changes to the Proposal before the final text is adopted. A majority coalition within the European Parliament (European People’s Party, Progressive Alliance of Socialists and Democrats, and Renew Europe, holding 55% of the seats) agreed on a simplified parliamentary procedure to ensure speedy adoption in 2025. Once adopted, the regulation will apply directly in the EU Member States’ legal systems, with no need for transposition.

Later this year, the Commission will also assess a potential extension of CBAM to include additional goods (including downstream goods) and indirect emissions and will examine how to support exporters of CBAM goods that it believes face competitive risks due to charges paid under the Emissions Trading Scheme (EU ETS). The Commission will then propose further amendments to CBAM, likely in early 2026.

Key Changes

Some of the most notable changes in the Commission’s Proposal:

• Exemption for importers of small quantities of certain CBAM goods: The Proposal introduces a new de minimis exemption. The exemption would exclude from CBAM scope importers of certain products (iron and steel, aluminium, fertilizers, and cement), provided that the quantity of imports is below 50 tonnes of net mass per year. The exemption does not apply to imports of electricity or hydrogen.
  
  Importers of covered goods below the quantitative threshold would be required to self-identify as “occasional CBAM importers” when lodging their customs declaration and monitor that they do not exceed the threshold over the year (according to the Commission’s Accompanying Document). If an importer exceeds the threshold, it becomes fully subject to CBAM for all of the annual imports of CBAM goods. The quantitative threshold would replace the existing value-based exemption for consignments of CBAM goods valued under €150.
  
  If adopted, the quantitative threshold would exempt 90% of all importers from CBAM while covering 99% of emissions. The threshold of 50 tonnes will be increased if it no longer ensures that at least 99% of emissions are covered.

• Delay of the purchase of CBAM certificates: Under the CBAM Regulation, the obligation to pay for emissions on imports of CBAM goods will apply from January 2026. The Proposal does not delay this start date. However, the Proposal provides for a special procedure for 2026 that will delay payment until 2027. Importers will not be able to purchase CBAM certificates in 2026. Instead, they will be able to purchase certificates from February 2027, for CBAM goods imported in 2026. For those goods, the price of CBAM certificates purchased in 2027 would be the quarterly average of the closing prices of the EU ETS allowances for the quarter of importation. From 2027, the price of CBAM certificates would be based on the weekly average of the closing prices of the EU ETS allowances on the auction platform.
• Delay and reduction of CBAM certificate holding requirements: From 2027, the number of CBAM certificates in a CBAM declarant’s account at end of each quarter must correspond to at least 50% of the emissions resulting from the production of imported CBAM goods (50% rule). This is a significant reduction of the current 80% rule. Further, the number of CBAM certificates purchased during a calendar year, and subject to repurchase by the national authorities, is now limited to the total number of certificates needed to fulfill the holding requirement, in contrast to the one-third limitation under the current rules.
• Delay of submission of CBAM declarations: The deadline for submitting annual CBAM declarations, and surrendering the requisite CBAM certificates, would be extended from May 31 to August 31 of each year, with the first deadline set as August 31, 2027.
• Authority to delegate CBAM declarations submission: The Proposal allows authorized CBAM declarants to delegate to third parties their obligation to submit CBAM declarations in order to facilitate compliance.
• Change in certain default values: The CBAM Regulation provides for two default values: (1) the average emission intensity of the exporting country, plus a markup, or in the absence of this information (2) an alternative default value based on the average of the worst-performing EU installations. The proposal does not address the first default value; however, the Commission proposes to replace the second default value by the average emission intensity of the 10 exporting countries with the highest emission intensity for which reliable data exist. The Commission considers that that its proposal is not “overly punitive” for importers that are not able to obtain actual emission data. Further, declarants would be allowed to choose between reporting actual emissions and default values. Importers using default values would not be required to have their emissions verified by accredited verifiers.
• Default values for third-country carbon prices: Currently, authorized CBAM declarants can claim a deduction of the CBAM charge based solely on the actual carbon price paid in a third country. The Commission proposes to permit the use of default carbon prices per country, with default prices determined by the Commission itself. Further, a deduction could be claimed for carbon prices paid in any third country during the production of the CBAM good, not simply in the country of origin.
• Changes to calculation of emissions: The Proposal seeks to exclude emissions resulting from certain production processes: (1) emissions from specific finishing processes for certain steel and aluminium goods and (2) emissions resulting from the production of input materials (precursors) already subject to the EU ETS or to a carbon pricing system fully linked to the EU ETS.
• Anticircumvention provisions: The Proposal strengthens the anticircumvention provisions by introducing explicit action against artificially splitting imports, including via nongenuine arrangements, to circumvent CBAM obligations, empowering national authorities to impose penalties. The Commission and the national authorities are jointly responsible to monitor and enforce the anticircumvention provisions.