CBAM’s implementation could be pushed back to 2027 by the EU. (Photo: iStock)
According to the draft proposal, the official implementation of the EU Carbon Border Adjustment Mechanism (CBAM) will be delayed until 2027. Small and medium-sized importers will have the opportunity to qualify for exemptions, while stricter penalties will be imposed on non-compliant businesses, with fines potentially reaching five times the original amount.
Revised CBAM proposal could exempt 180,000 businesses
The draft revision obtained by Reuters highlights that companies importing less than 50 tons of regulated products annually will be exempt from carbon tariffs. This measure is expected to alleviate pressure on the vast majority of businesses while ensuring that the total carbon emissions covered remain above 99%.
Dan Maleski, the CBAM head at Redshaw Advisors, also shared parts of the draft on his social media, noting that companies with embedded emissions (the total of direct and indirect emissions) under 100 tons annually will also be exempt from the carbon tariffs.
The CBAM, which began in 2023, is still in a transitional phase, and businesses are not yet required to pay the tariff. Under the current regulations, companies must pay the levy if the value of their imported regulated products exceeds 150 euros (about 157 USD). If the revisions pass, only about 10% of the originally estimated companies, around 20,000 businesses, will be affected.
According to EU statistics, 97% of carbon emissions covered by the carbon tariff come from less than 20% of companies. Therefore, the European Commission intends to relax some of the CBAM rules and focus the tariff pressure on the largest carbon emitters.
During the trial period, many businesses have already complained about the complexity of the rules and the time-consuming process of filling out related forms.
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Under current CBAM regulations, imports of regulated products valued over €150 must be declared. If the proposed draft passes, the number of affected companies will drop sharply from the originally estimated 200,000 to around 20,000. (Image source: Pexels)
EU to ease the burden on businesses under CBAM
Maleski also revealed that the official implementation of CBAM will be postponed by one year to 2027. By then, businesses will be required to purchase CBAM certificates to cover their product's carbon emissions.
For non-compliant businesses, the EU will impose stricter penalties, such as fines ranging from three to five times the original amount for splitting imports to avoid the carbon tariff.
Additionally, for importers who have already paid carbon fees in the country of origin, the EU will issue a unified method for calculating the average carbon price across different regions, making it easier for businesses to compute.
Other compliance requirements have also been slightly adjusted, including a reduction in the number of certificates required in advance, which will ease the financial pressure on importers. Furthermore, the deadline for submitting carbon emission reports will be changed from May to October.
The European Commission is expected to submit the CBAM revision proposal this week. After approval by the European Parliament and EU member states, the revised version will be officially implemented.
Source: Reuters, Financial Times
