EU Streamlines CBAM Rules
- Arne Mielken
- Oct 20, 2025
- 4 min read
🔒The EU simplifies CBAM reporting, emissions calculations, and certificate rules, easing compliance while keeping carbon safeguards.
On 17 October 2025, the European Union published Regulation 2025/2083, updating the CBAM framework (Regulation 2023/956). Known as the CBAM Simplification Regulation, this amendment reflects the European Commission’s goal to reduce administrative burdens on importers while maintaining strong carbon leakage safeguards. The updated rules provide a clearer, more structured set of obligations for businesses importing CBAM goods.
Background
Introduced in 2023, CBAM aims to prevent carbon leakage by reflecting the embedded carbon costs of imports into the EU. During the transitional phase, importers reported carbon content without facing certificate surrender obligations. Following calls from the European Council in late 2024 to simplify reporting and reduce administrative burdens, the Commission proposed dedicated amendments as part of the Omnibus I package in February 2025. After approval by the European Parliament and Council, the updated Regulation took effect on 20 October 2025.
Download the legislation change
Mass-Based Threshold for Simplified Compliance
A major change is the replacement of the old low-value exemption with a cumulative mass threshold. Importers whose annual imports of CBAM goods in iron and steel, aluminium, fertilisers, and cement do not exceed 50 tonnes are exempt from reporting, declarations, and certificate obligations. Electricity and hydrogen imports are excluded from this threshold. Any import exceeding 50 tonnes triggers CBAM obligations for all goods imported that year, including those under the threshold.
The European Commission will review this threshold annually to ensure it covers at least 99% of embedded emissions. Adjustments, if required, will apply the following calendar year, balancing carbon coverage with administrative efficiency.
Compliance Oversight
National authorities, coordinated by the Commission, will monitor compliance via the CBAM registry. Importers approaching 90% of the threshold will be flagged. Artificially splitting shipments to avoid obligations is prohibited, with penalties ranging from three to five times the standard EUR 100 per tonne of emissions. Minor overshoots within 10% of the threshold may see reduced penalties. Payment of the penalty releases importers from subsequent CBAM obligations for those imports.
Authorised CBAM Declarants
Importers expecting to exceed the threshold must apply for authorised CBAM declarant status in advance. Applications submitted by 31 March 2026 allow provisional importation until a decision is made. Declarants may delegate reporting to EU-based third parties with an EORI number, but remain fully responsible for compliance.
Reporting and Certificates
Annual CBAM declarations and certificate surrender are due by 30 September of the year following importation. Declarations must include quantities imported, verified or default embedded emissions, certificates to surrender, and verification reports when relevant. The minimum quarterly purchase of CBAM certificates has been reduced from 80% to 50% of embedded emissions, accounting for EU ETS free allocations.
Emissions Calculation
Importers may use verified actual values or default figures for embedded emissions. Default values are based on the average emission intensity of the ten highest-emitting exporting countries when precise data is unavailable, providing standardisation.
Carbon Price Adjustments
CBAM declarants can reduce certificate obligations to reflect carbon costs paid in third countries. From 2027, the Commission may establish default carbon prices for third countries. Payments made in countries other than the origin of imported goods are eligible for deduction, preventing double carbon pricing.
CBAM Certificates
Certificates for emissions embedded in 2026 imports will be sold via a centralised platform starting 1 February 2027. Initial prices are based on the quarterly EU ETS average for 2026, then weekly averages from 2028. Declarants may request repurchase of excess certificates. Certificates older than two years are cancelled annually without compensation.
Penalties
Penalties align with the EU ETS excess emissions regime (EUR 100 per tonne), with reductions for minor or unintentional errors. Indirect customs representatives acting as declarants are liable unless representing EU-based importers without assuming responsibility. This ensures accountability and discourages circumvention.
Sectoral and Technical Clarifications
Certain goods are clarified or excluded. Non-calcined kaolinic clays are excluded due to low carbon intensity. For electricity, only direct emissions count. Third-country operators must provide parent company information when registering. Verifiers must register through their national competent authority within two months of accreditation, starting no earlier than 1 September 2026. Operational costs for the CBAM platform are borne by authorised declarants.
Looking Ahead
Further updates are expected in late 2025, including extending CBAM to downstream products, anti-circumvention measures, rules for the electricity sector, and methodologies for embedded emissions. Secondary legislation will define verification standards, certificate management rules, and customs reporting. A full CBAM review is planned before the end of 2025 to evaluate potential expansion to chemicals, polymers, and services such as transport.
With these changes, CBAM provides importers with a structured framework that balances regulatory clarity with the EU’s climate objectives, offering a practical path to compliance under the updated rules.
Looking Ahead
Additional legislation is expected in late 2025, covering:
Extending CBAM to downstream products
Strengthening anti-circumvention measures
Defining rules for the electricity sector
Calculating embedded emissions methodology
Adjusting certificates for EU ETS free allocation and foreign carbon prices
Accreditation standards and verification procedures
Customs reporting and communication
A full review of CBAM is also planned before the end of 2025 to consider extending the mechanism to chemicals, polymers, and services like transport.
With these updates, CBAM now offers importers a more manageable, transparent framework while keeping carbon compliance aligned with EU climate objectives.conducted by year-end to consider expanding CBAM to additional goods and services, such as chemicals, polymers, and transport.
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