The European Commission published its proposal to simplify the CBAM and announced a review on extension of the CBAM later this year.

The CBAM applies to certain goods being imported into the EU. It is designed to apply the same carbon costs to those goods as would have been incurred had they been produced in the EU.

We last looked at CBAM in a post on Provisions applying from Q4 of 2024 and in our usual horizon scanner, where we noted that domestic regulations provided for offences and penalties additional to the mechanisms in the CBAM Regulation.

The Commission states that simplifying the CBAM is part of an unprecedented simplification effort intended to deliver climate objectives without undue burden on business. It has published a detailed draft Regulation COM(2025)87 and Staff Working Document .

De Minimis Threshold

According to the Commission, a limited number of importers account for more than 99% of emissions embedded in imported goods. Therefore, a key amendment would introduce a de minimis threshold. It would exempt importers, where the imported goods do not exceed 50 tonnes of net mass (cumulatively per calendar year), from obligations regarding CBAM authorisation, declarations, and purchase of CBAM certificates.

Exempt importers will, however, need to self-identify as “occasional CBAM importers” when lodging customs declarations and monitor that they do not exceed the threshold over the year. The de minimis threshold will not apply to electricity and hydrogen.

The level of de minimis threshold chosen by the Commission is calculated to keep 99% of emissions within scope of the CBAM, while exempting around 90% of importers from its scope. In scope importers must still include information in their CBAM declarations on below threshold imports.

Simplification

Other proposed changes aim to simplify obligations around authorisation of declarants, data collection from producers outside the EU, calculation of embedded emissions, emissions verification rules, and calculation of declarants’ financial liability. Some proposed amendments are listed below.

• The date from which CBAM authorised declarants are required to obtain CBAM certificates would be pushed back by a year. Member States would begin selling CBAM certificates on 1 February 2027, but this remains in respect of liabilities accrued from the beginning of 2026.
• At the end of each quarter, declarants were required to have enough CBAM certificates on account to correspond to at least 80% of their embedded emissions since the start of the year. To avoid declarants buying more CBAM certificates than they need, the proposal would reduce this level to 50% and integrate the free allocation of EU ETS allowances.
• The annual deadline for making CBAM declarations and surrendering certificates would be moved from 31 May to 31 August. The first deadline would be 31 August 2027 for goods imported in 2026.
• Declarants would be able to delegate access to the CBAM registry and the right to submit a CBAM declaration to a third party (such as a consultant).
• A requirement on the Commission to “specify conditions when actual emissions cannot be adequately determined” would be removed, so that declarants could freely choose between using actual embedded emissions and default values with a mark-up. It is also proposed to remove the requirement to verify embedded emissions that are based on default values.
• It is intended to simplify netting off of any carbon price paid outside the EU by making it possible to use default carbon prices and to claim carbon prices paid in non-EU countries other than the country of origin of the goods.
• Where input materials have already been subject to the EU ETS or a carbon pricing system fully linked to it, their embedded emissions would not need to be accounted for in the calculation of embedded emissions of complex goods.
• It is clarified that electricity will be added to the list of goods for which only direct emissions are relevant to the calculation of embedded emissions.
• Non-calcined kaolinic clays would be removed from the list of cement goods.

Review

The Commission also announced (in the Clean Industrial Deal) that it will review the CBAM to:

• assess the extent to which it should be extended to additional EU ETS sectors and downstream products, and the inclusion of indirect emissions across all CBAM sectors,
• set out a strategy to tackle circumvention risk, and
• consider how to address carbon leakage of goods exported to non-EU countries.

Though not mentioned by the Commission, another potential area for consideration will be the development by the UK of a CBAM which excludes electricity from its scope.

The Commission will report on its review in H2 of 2025 and publish draft legislation in Q1 of 2026. The Commission also indicates it will continue to support partner countries’ decarbonisation efforts, including through development of carbon pricing and carbon markets worldwide.