CBAM Simplification: Parliament Approves Key Updates

Last week, during plenary session, the European Parliament adopted the compromise text on the CBAM simplification framework laid out in the "Omnibus I" package.

The provisional agreement between the Parliament and the Council was reached in June, following the initial proposal published in February. The adopted changes aim to exempt small and medium-sized enterprises as well as simplify the reporting. 

The main changes adopted by the Parliament today are:

1. Increased de-minimis threshold. The EUR 150 customs de-minimis threshold per shipment is replaced with a mass-based annual threshold of 50 tonnes per importer, per type of imported goods covered by CBAM. While it excludes 90% of importers, it ensures that at least 99% of embedded emissions on imported goods remain captured. The threshold does not apply to imports of hydrogen and electricity.
2. Extended deadlines. For declaration and certificate surrender, deadlines moved from 31 May to 30 September. Deadline to request repurchase of excess CBAM certificates moved from 30 June to 31 October.
3. Increased possibilities to reduce CBAM liability. Registrants can claim a reduction in their CBAM liability based on carbon costs paid in any third country prior to import, not just in the country of origin.
4. Possibility to use average carbon pricing values to account for the cost paid in a third country. If the actual prices cannot be determined, the declarant may be able to claim a reduction based on yearly default carbon prices published in the CBAM registry. If the default emission intensity is used, default carbon prices must be used too. It remains unclear how the Commission will calculate these prices, given the complexity of some carbon pricing schemes.
5. Increased CBAM certificate purchase flexibilities. The percentage of CBAM certificates that must be purchased in advance each quarter decreases from 80% to 50% of the embedded emissions. This obligation is proposed to start from Q1 2027.
6. Increased limits of CBAM certificate repurchasing. The limit for repurchasing excess CBAM certificates has been raised from one-third of the total certificates purchased in a calendar year to the total CBAM liability for that year.
7. Delayed CBAM certificate sales. The start of CBAM certificate sales has been delayed to February 2027. The certificate price will stay equal to the average EU ETS auction price for the previous week. For 2026 compliance, however, the certificate price will equal the average quarterly EU ETS auction price for the quarter when the goods were imported.

Before these changes are published in the EU Official Journal, they still need to be approved by the Council. That should only be a formality since the Council has agreed to this provisional text.

Recently, the Commission commented that it might consider further flexibilities, following the US-EU Trade Agreement, featuring additional flexiblities to imports from the US. They might replace the actual emissions reporting with the usage of default values per product per country, as the Member States are also looking to solve the possible "green shuffling" problem. On the other hand, DG TAXUD has again confirmed that the regulation will start in 2026 despite the calls for its delay.

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