EU CBAM Regulation Simplification – European Commission Omnibus Proposal

The European Commission’s Omnibus Sustainability Proposal was published on February 26th, 2025, and introduced, among a host of other sustainability measures, a wave of signification simplifications to how the EU’s CBAM will operate.

 For traders importing CBAM affected goods into the EU, the most important takeaways are;

• Introduction of an exemption threshold for small importers: It has been recognised that the administration burden of CBAM reporting on smaller importers has posed many challenges, and as a response the European Commission announced that companies importing less than 50 tonnes of covered CBAM goods per annum (corresponding to approximately 80 tonnes of CO2 equivalent per annum) will be exempt from EU CBAM. This will remove EU CBAM reporting and certificate requirements for up to 90% of importers while still covering 99% of emissions in scope.
• Delay of CBAM certificate purchasing: Although CBAM will still commence its definitive phase in 2026, the obligation to purchase CBAM certificates has been postponed to 2027 to give traders additional time to prepare for this impact.
• Intensified penalties for CBAM non-compliance: while penalties arising from data discrepancies or minor errors may see reduced penalties, the European Commission has committed to introducing tougher fines for deliberate tactics to avoid CBAM such as import splitting which could see penalties three to five times larger than previously stated.

Other changes were included in this CBAM simplification including some scope adjustments, changes to the authorisation of declarants and minor tweaks to simplify the compliance. The EU’s CBAM is still evolving and the financial impact of it is still unclear. With the UK CBAM being implemented in 2027, crucially there will now be a significant overlap and alignment in proposed implementation dates in the two carbon regulations. These that will require close consideration prove issues for traders from a product coverage, data acquisition, registration and reporting compliance, and ultimately a financial perspective. 

Pending a report to be published in the middle of 2025, the EU’s CBAM will likely broaden its product scope when in its definitive regime to include other carbon intensive production including paper, pulp, ceramics and glass. 

The Global Trade team are working with a number of clients to help them to interrogate their import product profile across the EU and UK in order to understand their exposure to the CBAM regulations and provide assistance in navigating data acquisition, CBAM registration and reporting and compliance requirements. Please contact us if you think there are clients in your portfolio that may be impacted by these CBAM or broader Omnibus developments.

Contacts

If you require further information, please call your regular contact in EY or contact any of the following:

• Deirdre Hogan
• Colin Doolin
• Graham Reid
• Marie Melody
• Derarca Dennis
• Lewis Murphy