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New legislation
European Commission sets conditions and procedures for authorized CBAM declarants
On 18 March 2025, the Commission Implementing Regulation (EU) 2025/486 was published in the Official Journal of the European Union. This new regulation outlines the rules for applying for the status of authorized Carbon Border Adjustment Mechanism (CBAM) declarant. The regulation takes effect on 28 March 2025.
The CBAM is set to take effect from 1 January 2026, as per Regulation (EU) 2023/956. Notably, the European Commission proposed changes to the CBAM in its first Omnibus Package, including a new de minimis threshold that would exempt 90% of current importers of CBAM-covered goods, potentially affecting around 182,000 importers. Importers of CBAM goods weighing up to 50 tons will be exempt from CBAM obligations, while indirect customs representatives will still have obligations from the first import.
The regulation specifies the application process for authorized CBAM declarants, requiring electronic submissions in the CBAM registry and compliance with various criteria, including financial and operational capacity. The competent authority will review applications within 120 days, with a maximum total application period of 180 days.
Key compliance requirements include a clean record regarding customs and tax violations, sufficient financial standing, and an administrative organization capable of managing CBAM obligations. Additionally, applicants must provide security if they have not been established for two financial years prior to the application.
The regulation also outlines procedures for status reassessment, revocation, and reapplication for authorized CBAM declarants. The next steps for CBAM legislation are anticipated in 2025, with a comprehensive review expected to address potential extensions of CBAM to other product categories. For further insights, please refer to our alert.
European Commission releases Omnibus Package I proposal to simplify EU Carbon Border Adjustment Mechanism regulation
On 26 February 2025, the European Commission released two Omnibus simplification packages (Omnibus Packages I and II) focusing on sustainability regulation. These packages aim for a 25% reduction in administrative burdens and a 35% reduction for SMEs by the end of their mandate.
Omnibus Package I seeks to eliminate overlapping regulations, enhance EU competitiveness, and simplify investment programs. It includes amendments to the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), Taxonomy, and Carbon Border Adjustment Mechanism (CBAM). If implemented, these proposals could save approximately €6.3 billion in annual administrative costs and mobilize an additional €50 billion in investments.
Additionally, the Commission unveiled the Clean Industrial Deal, a strategic plan to boost EU industries' competitiveness and accelerate decarbonization, aiming to mobilize over €100 billion for clean manufacturing and promote EU-made products.
Key changes proposed for the CBAM include a new de minimis threshold exempting importers of up to 50 tons of CBAM goods per year from obligations, with a timeline deferral for purchasing certificates to February 2027. Other amendments focus on simplifying reporting, compliance requirements, and penalties.
The proposed changes are subject to negotiation among the EU institutions, with a review of CBAM effectiveness measures expected in 2025. Businesses should assess their potential impact under the evolving regulatory landscape, as many may soon be subject to CBAM obligations. For further insights, please refer to our alert.
How to navigate the EU Omnibus Simplification Package
The first EU Omnibus Simplification Package is a significant legislative initiative designed to streamline and simplify existing sustainability reporting requirements and the due diligence framework, reducing the number of companies in scope and making it easier for those companies that remain in scope to comply.
In our guideline "How to navigate the EU Omnibus Simplification Package" we summarize at a high level the European Commission’s proposed amendments to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CS3D), the EU Taxonomy Regulation (EUTR), and the Carbon Border Adjustment Mechanism (CBAM).
For each of CSRD, CS3D, EU Taxonomy and CBAM you will find the following sections:
- Recap of the legislation
- Proposed changes in the EU Omnibus Simplification Package
- Timelines ▪ What key aspects of legislation are not intended for change?
- What impacts could the proposed changes have on businesses?
- What should businesses do to prepare? The content is based on our initial impressions and reading of the proposals in the EU Omnibus Simplification Package as of the date on the cover page (the proposals are subject to amendment by the EU co-legislators).