The European Union is taking decisive steps to refine its Carbon Border Adjustment Mechanism (CBAM), easing compliance for small and medium-sized enterprises (SMEs) while maintaining its environmental integrity. The European Parliament’s Environment Committee has approved a new threshold of 50 tonnes, which exempts approximately 90% of importers—mainly SMEs and individual traders—from CBAM reporting requirements. 

Despite these exemptions, the revised regulation will still cover 99% of CO₂ emissions from high-emission imports such as steel, aluminium, cement, and fertilisers. This ensures that the EU’s ESG and carbon neutral strategy objectives remain on track, even as administrative burdens are reduced for smaller market participants. 

Introduced under the EU’s “Omnibus I” simplification package, the new rules aim to enhance operational efficiency without compromising environmental goals. Rapporteur Antonio Decaro emphasized that the reforms “simplify matters for companies without dismantling or weakening the CBAM,” affirming the EU’s commitment to preventing carbon leakage and maintaining global climate leadership. 

Key updates include streamlined authorisation procedures, clearer emissions calculation guidelines, and strengthened anti-abuse measures. These adjustments are designed to make CBAM more transparent and manageable, particularly for businesses navigating complex ESG requirements. 

The proposal was overwhelmingly supported in committee, with 85 votes in favor. A plenary vote in the European Parliament is scheduled for 22 May 2025, to be followed by negotiations with the EU Council. 

As a vital complement to the EU Emissions Trading System (ETS), CBAM ensures a level playing field for European industries while incentivizing sustainable practices among global trading partners. The European Commission is expected to review CBAM’s scope in early 2026, potentially expanding coverage to additional sectors at risk of carbon leakage. 

This move reinforces the EU’s strategy to integrate ESG principles into trade policy and advance its broader carbon neutral goals. 

Sources: 

https://esgnews.com/eu-moves-to-ease-cbam-rules-for-smes-while-keeping-99-of-emissions-covered/ 

https://illuminem.com/illuminemvoices/eu-moves-to-ease-cbam-rules-for-smes-while-keeping-99-of-emissions-covered