The European Parliament and the Council of the European Union have announced that they have adopted Regulation (EU) 2025/2083, amending the original CBAM Regulation (EU) 2023/956.
The new law aims to simplify, clarify, and strengthen the Carbon Border Adjustment Mechanism (CBAM) ahead of its full enforcement on January 1, 2026.
It reflects lessons learned during the transitional phase (October 2023-December 2025) and introduces procedural and technical adjustments to improve administrative efficiency.
50-mt “de minimis” exemption
A new mass-based threshold exempts importers with total annual imports of 50 mt or less of goods covered under Annex I, including iron and steel, aluminum, fertilizers, and cement, from CBAM reporting, declaration, and certificate purchase obligations.
This “de minimis exemption” relieves small traders of compliance burdens while maintaining 99 percent coverage of embedded emissions under CBAM.
Imports of electricity and hydrogen are excluded due to their distinct trade and emissions profiles.
Declarant obligations and compliance
Importers anticipating exceeding the 50-mt threshold must apply for authorized CBAM declarant status before crossing the limit. Applications submitted by March 31, 2026, will allow continued imports until approval is granted. Indirect customs representatives acting for importers must also be registered as declarants.
Authorized declarants will file their first annual CBAM declaration by September 30, 2027, covering 2026 imports. Declarations must include verified data on import volumes, embedded emissions, and carbon prices paid abroad.
Alignment with EU ETS and default values
The amendment aligns CBAM emission boundaries with those of the EU Emissions Trading System (ETS), excluding emissions from downstream finishing processes not covered by the ETS.
When reliable third-country data is lacking, default values will reflect the average emission intensity of the ten most carbon-intensive exporting countries, minimizing the risk of carbon leakage.
Declarants may reduce the number of certificates surrendered if they prove payment of a carbon price in the country of origin, supported by independent certification and proof of payment.
From 2027, the European Commission may publish default carbon prices for third countries in €/ton CO₂, based on verified public data and official submissions.
Penalties, monitoring and certificate rules
Importers exceeding the 50-mt limit without authorization will face financial penalties, though payment of the fine will discharge further obligations for that year. Penalties for authorized declarants failing to surrender certificates will remain aligned with the EU ETS excess emissions penalty, ensuring consistency and deterrence.
Member states will begin selling CBAM certificates in 2027 for emissions linked to 2026 imports. Prices will mirror the average 2026 EU ETS allowance prices, while declarants must hold CBAM certificates equal to at least 50 percent of estimated annual emissions each quarter, reduced from the previous 80 percent requirement.
The European Commission and national authorities will monitor import flows to prevent circumvention practices such as shipment splitting and may revise the exemption threshold via delegated acts if emissions or trade volumes shift significantly.
