The European Parliament’s Environment Committee has voted to ease compliance with the EU’s Carbon Border Adjustment Mechanism (CBAM), proposing a 50-tonne threshold that would exempt around 90 percent of importers, mostly small and medium-sized enterprises (SMEs). The CBAM regulation shift forms part of the broader Omnibus I simplification package introduced by the European Commission in early 2025 to weaken corporate sustainability reporting.
Easing the burden without diluting climate ambition
The CBAM, a cornerstone of the EU’s climate policy, was designed to place a carbon price on imports of high-emission goods such as steel, cement, fertilisers, and aluminium. It ensures a level playing field for European producers and discourages carbon leakage by holding international suppliers to comparable emissions standards.
However, the administrative burden of compliance, especially for smaller companies, has been a growing concern since its introduction. Under the revised proposal, SMEs and occasional importers handling less than 50 tonnes of covered goods annually would be exempt from CBAM’s reporting requirements.
This pragmatic threshold maintains environmental integrity, still capturing 99 percent of emissions from CBAM-regulated imports, while streamlining the system for the vast majority of companies. “This approach enables us to simplify matters for companies without dismantling or weakening the CBAM,” said rapporteur Antonio Decaro. The endorsement passed with overwhelming support – 85 votes in favour, one against, and one abstention.
Boost performance and resilience with practical, online sustainability training
Streamlining compliance and closing loopholes
Beyond the exemption threshold, the proposal introduces key improvements to the CBAM framework:
- Simplified authorisation for declarants, making it easier for importers to understand their obligations and engage with the system.
- Clearer emissions calculation guidance, providing consistency and reducing room for error or manipulation.
- Tighter anti-abuse provisions, ensuring that the exemption isn’t used to game the system or fragment shipments to avoid reporting.
Taken together, these measures aim to increase the system’s legal clarity while reducing red tape.
A strategic shift, not a rollback
While some critics might interpret the exemption as a step back, the evidence suggests the contrary. The changes are not about watering down climate policy, but about focusing regulatory attention where it matters most. The bulk of emissions from high-carbon imports, by both volume and intensity, still fall within the mechanism’s scope.
By targeting administrative relief at low-volume importers, the EU reinforces its dual commitment to climate leadership and business pragmatism. The revised CBAM regulation also highlights a more nuanced approach to climate policy – one that protects competitiveness and regulatory integrity without compromising environmental outcomes.
Conclusion – What’s next?
A plenary vote is scheduled for today (May 22nd, 2025), after which the proposal will move into negotiations with the Council. Parallel to this, the European Commission will assess by early 2026 whether more sectors should fall under the CBAM umbrella.
For businesses, particularly SMEs navigating climate regulations for the first time, the updated CBAM offers breathing room, but not a free pass. Sustainability knowledge and preparation remain key. Our corporate compliance training is designed to help organisations align with the latest reporting and regulatory expectations.
