In a major policy shift, the EU Parliament and Council have agreed to exempt 90% of importers—primarily small businesses—from the Carbon Border Adjustment Mechanism (CBAM), while keeping the bulk of emissions coverage intact. The move aims to reduce administrative burdens on companies while preserving the EU’s ambitious ESG and carbon neutral strategy objectives. 

Adopted in 2023 and set for full implementation in 2026, CBAM is the EU’s carbon import tax designed to prevent “carbon leakage” by leveling the playing field between EU manufacturers under the Emissions Trading System (ETS) and foreign producers with less stringent carbon rules. Despite the exemptions, officials confirmed that 99% of emissions from key carbon-intensive imports—including steel, aluminum, cement, iron, and fertilizers—remain under CBAM’s scope. 

“We have answered calls from companies to simplify and streamline the process,” said Parliament rapporteur Antonio Decaro. “We are still fully committed to achieving climate neutrality by 2050.” 

The agreement introduces a new 50-tonne annual threshold, exempting small importers and SMEs from CBAM compliance, replacing the prior “negligible value” exemption. This aligns with the European Commission’s broader Omnibus I package and its Competitiveness Compass strategy, which aims to reduce reporting burdens by 25% for all companies and 35% for SMEs. 

Beyond the new threshold, the deal simplifies authorization, data collection, emissions calculations, verification rules, and strengthens anti-abuse provisions. Polish Minister for EU Affairs Adam Szłapka emphasized, “This agreement marks another step towards reducing administrative burden and enhancing EU competitiveness.” 

Once formally endorsed by Parliament and Council, the new CBAM framework will balance ESG commitments with economic pragmatism—supporting Europe’s carbon neutral strategy while safeguarding business growth. 

Source: 

https://www.esgtoday.com/eu-parliament-council-agree-to-remove-90-of-companies-from-cbam-carbon-import-tax/