The European Union's Carbon Border Adjustment Mechanism (CBAM) regulation is undergoing significant simplifications aimed at easing the compliance burden for importers, while maintaining its environmental objectives. These changes are designed to streamline reporting requirements, enhance data processing, as well as improve the overall efficiency of the CBAM framework.
Here Jamie McLeod, senior manager, customs, at Crowe UK – a leading audit, tax, advisory and consulting firm – gives an overview of the proposed amendments to the CBAM regulation.
The European Union has introduced several measures to simplify compliance to CBAM without compromising the mechanism's environmental goals. These changes are based on feedback from stakeholders and the experience gained so far during the transitional phase of CBAM implementation.
Exemption for small quantities
A new mass-based threshold will exempt importers of very small quantities of CBAM goods from compliance obligations. The new cumulative annual threshold will be set at 50 tonnes of imported goods per importer. The prior de minimis threshold was very low, with all consignments exceeding €150 in value in scope of the measure.
This change is expected to exempt around 90% of importers while still covering over 99% of embedded emissions. It should be noted that the threshold applies to the importer – a UK trader exporting small volumes of goods may still need to provide CBAM data to their customer depending on the customer’s import volumes.
Simplified reporting measures
The simplified measures on CBAM reporting cover streamlining the authorisation process for national competent authorities and the Commission; enhancing the efficiency of data collection from third-country producers; introducing simplified methods for calculating embedded emissions for specific goods, particularly aluminium and steel downstream products; simplifying the calculation of financial liability for authorised CBAM declarants during the import year; as well as allowing importers to claim carbon prices paid in third countries other than the country of origin.
Enhanced monitoring and supervision
There will be improved data processing and information exchange between the Commission and national authorities to better detect risks and take appropriate actions. Additionally, there will be changes to the portal for registering operators and installations in third countries, and the registration of accredited verifiers to facilitate reporting.
Extended deadlines and adjustments
The start date for the sale of CBAM certificates has been moved to February 2027 to address uncertainties related to the post-transitional period. Previously, certificates had to be purchased from January 2026. Whilst the timeframe for purchasing certificates is changing, a CBAM liability will still be accrued from the start of the definitive period in January 2026. The timing of when the CBAM reports are due in the definitive period will also change, from May to October.
Authorisation and penalties
Importers expecting to exceed the new threshold must apply for authorisation; failure to do so will result in penalties. Penalties will also be imposed for non-compliance with CBAM obligations. The competent authorities may adjust the penalty amount based on factors such as the extent of unreported information, the level of cooperation, and the nature of the non-compliance.
Implications for businesses
While these simplifications aim to reduce the administrative burden on businesses, particularly small and medium-sized enterprises (SMEs), the compliance process remains complex and the burden will remain substantial. This year will bring additional developments, changes, and clarifications, on EU CBAM and future reports may suggest further enhancements to the mechanism and potentially broaden its scope to include other goods susceptible to carbon leakage. That is why businesses affected by CBAM must stay informed about these updates and understand their implications.
Crowe’s customs team are experienced in supporting businesses with their CBAM obligations and can support you in your compliance and reporting journey. To learn more about how these changes may impact your business and how we can support you, please contact us.
Will joined Fastener + Fixing Magazine in 2007 and over the last 15 years has experienced every facet of the fastener sector - interviewing key figures within the industry and visiting leading companies and exhibitions around the globe.
Will manages the content strategy across all platforms and is the guardian for the high editorial standards that the Magazine is renowned.
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