Carbon Border Adjustment Mechanism: EU CBAM simplification – A detailed summary

1. What is EU CBAM and why the simplification?

The EU CBAM is the mechanism designed to prevent “carbon leakage” by ensuring that imported goods face a carbon-price equivalent to that paid by EU-based producers.  As complexities piled up, the EU launched a “simplification” package (the so-called Omnibus I) to reduce the regulatory burden while keeping the core climate goals intact.

2. Key change: De minimis threshold

One of the most significant updates is the 50-tonne annual threshold: importers of goods listed in Annex I (iron & steel, aluminium, fertiliser, cement) that don’t exceed 50 tonnes per year are exempt from full CBAM obligations. This change is expected to exempt around 90% of importers, while still covering ~99% of embedded emissions in the goods in scope.

What it means: If you import small quantities in those sectors, you may now fall outside the heavy obligations of CBAM.

Note: This threshold does not apply to hydrogen or electricity imports.

3. Authorised Declarant status & delegation

If you exceed the threshold (or expect to), you must apply for Authorised CBAM Declarant status. You may continue importing in 2026 if you apply by 31 March 2026. You can delegate submission of CBAM declarations to a third party (such as a consultant) provided they meet certain criteria (like EORI number, EU-Member-State establishment), but you as the authorised declarant remain legally responsible.

4. Certificates, submissions & timing

• The annual CBAM declaration must be submitted by 30 September of the following year
• The sale of CBAM certificates begins in 2027 (for 2026 emissions)
• The proportion of embedded emissions for which certificates are required is reduced from 80% to 50%
• You may rely on verified data from the previous year (for the same goods & origin) in certain cases

5. Emissions calculation & scope refinements

• For certain aluminium and steel goods: embedded emissions focus mainly on precursor materials; finishing processes at installations not covered by the EU Emissions Trading System (ETS) may be excluded except in integrated facilities
• Precursors already covered under the ETS or a linked pricing system should not be double counted
• Default values will be provided by the Commission; verification will apply only to actual values when used
• Non-kaolinic clays are excluded; some goods will only apply direct (not indirect) emissions in the calculations

6. Carbon price deductions & verifiers

• An annual average effective carbon price (in EUR/tonne CO₂e) paid in third countries will be published by the Commission
• Importers may claim certificate reductions based on verified carbon prices paid abroad, but careful: the carbon price associated with emissions already covered under the ETS or a linked regime is not deductible again
• Verifiers must be legal entities accredited under Regulation (EU) 2018/2067 and must be accessible to the CBAM registry for validation of data

7. Penalties & compliance risk

• Minor/unintentional errors (eg due to incorrect info from third parties) can lead to reduced penalties
• Unauthorised imports exceeding the threshold will incur penalties equal to the full amount of embedded emissions, and payment of those penalties releases the importer from obligation to submit a declaration
• Minor infringements (such as importing after authorisation is rejected) result in reduced penalties

8. What this means for your business

If you import small quantities (under ~50 tonnes/year) of the covered goods – you may now be outside the full CBAM scope, which means lighter compliance.
If you exceed the threshold or deal in hydrogen/electricity – you still face full obligations, but the simplification measures (longer timelines, delegation, using previous year data) provide relief.

Bottom line: It’s a big easing of regulatory burden for many, but still very much in play for higher-volume importers.

1. Next steps you should take

2. Map your imports: Are you importing goods in scope (iron/steel, aluminium, fertiliser, cement, hydrogen, electricity)?
3. Check your volumes: Are you under or above the 50-tonne threshold (or expecting to be)?
4. Ensure data availability: Embedded emissions, supplier info, carbon pricing in source country.
5. Decide on authorised declarant status and involement of any third-party delegate.
6. Plan for certificate purchases and registry submissions (2026 onward).

Summary & call to action

The simplification of the Carbon Border Adjustment Mechanism (EU CBAM) marks a strategic shift, easing burdens for many importers without watering down the climate ambition. By introducing a clear de-minimis threshold, loosening certain compliance requirements, and aligning better with the ETS framework, the EU has made compliance more manageable. However, the full obligations still stand for significant importers or goods outside the threshold.

If you’d like to visit our CBAM web page to explore how our services can help you navigate compliance, or enquire about our CBAM Compliance service, please click here or get in touch today.