The Council of the European Union has formally approved a regulation simplifying the Carbon Border Adjustment Mechanism (CBAM), aiming to ease compliance for businesses while maintaining the mechanism’s climate ambition. CBAM, set for full implementation in 2026, places a levy on imports based on their embedded greenhouse gas emissions to prevent carbon leakage and ensure fair competition for EU industries. 

The reform, part of the Omnibus I legislative package, introduces procedural and technical adjustments to reduce costs for importers, particularly small and medium-sized enterprises (SMEs). Officials emphasized that the simplified rules still safeguard climate integrity, with coverage of embedded emissions remaining at roughly 99%. 

A key change is the introduction of a new de minimis threshold: imports of CBAM-covered goods up to 50 tonnes annually per importer will be exempt. This shift replaces the previous negligible-value exemption and is expected to ease administrative pressure on SMEs and individuals importing low volumes, while keeping large-scale industrial flows fully subject to CBAM rules. 

Additional provisions focus on ensuring a smooth transition in 2026. Importers awaiting registration will be permitted to bring in covered goods under defined conditions, reducing the risk of trade bottlenecks at EU borders during the initial roll-out. 

The regulation also streamlines compliance procedures, including clearer rules on data collection and emissions calculation, adjustments to verification requirements, refinements to authorisation processes for CBAM declarants, and recalibrated penalties. The framework governing indirect customs representatives has also been revised to reduce legal uncertainties. 

According to Denmark’s Minister for European Affairs Marie Bjerre, the reforms are designed to balance Europe’s green transition with competitiveness. She noted that the changes make compliance simpler for businesses without weakening the EU’s climate goals. Businesses trading in CBAM-covered goods now have limited time to align compliance processes with the streamlined framework before the mechanism takes effect in 2026.