CBAM’s implementation could be pushed back to 2027 by the EU. (Photo: iStock)
Updated: European Parliament supports CBAM amendments
On May 22, the European Parliament voted in favor of proposed amendments to the Carbon Border Adjustment Mechanism (CBAM), originally introduced by the European Commission in February. The revised draft lowers the carbon tariff exemption threshold to 50 tonnes and exempts approximately 90% of companies, around 180,000 firms, from CBAM obligations, while still covering 99% of total reported emissions. The implementation of carbon tariffs has also been postponed for one year.
The proposal passed with 564 votes in favor, 20 against, and 12 abstentions. Antonio Decaro, Member of the European Parliament and rapporteur for the proposal, welcomed the decision, saying it eases the burden on businesses without undermining CBAM’s overall impact.
The draft legislation also confirms that CBAM certificates, required for offsetting carbon emissions, will go on sale starting February 1, 2027, granting companies additional time to adjust and prepare. Following the European Parliament’s approval, EU member states will now take positions on the amendments before entering negotiations on the final legal details.
Ahead of the vote, a study commissioned by European Aluminium and conducted by Ramboll Management Consulting warned that CBAM’s designation of scrap materials as having "zero-emissions value" could incentivize importers to overreport recycled content to avoid carbon costs. The study also pointed out the lack of reliable verification methods for such claims.
European Aluminium has urged the European Commission to delay the inclusion of aluminium products under CBAM and to revise relevant regulations before expanding the mechanism’s scope, aiming to close potential loopholes and minimize carbon leakage.
The following is the report from Feb. 25, 2025：
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
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