24 March 2025

by Ross Wombwell

The European Union's Carbon Border Adjustment Mechanism (CBAM) regulation is designed to address carbon leakage by requiring reporting on carbon embedded emissions for certain goods and precursors imported into the EU.

This regulation places third-party accredited verification requirements on exporters, aiming to create a level playing field for manufacturers inside and outside the EU.

Industries and products affected:

• Cement
• Iron and steel
• Aluminum
• Fertilizers
• Hydrogen
• Electricity

Certain operations within the marine industry will therefore be affected.

As part of the first Omnibus package on 26 February 2025, the EU Commission have proposed a set of changes to simplify CBAM and cut red tape.

The CBAM simplification package

The EU commission are proposing to simplify CBAM for small CBAM importers, by introducing a new CBAM de minimis threshold exemption of 50 tonnes mass. This would keep around 99% of emissions still in the CBAM scope, while exempting around 90% of the importers.

For those importers who expect to remain in the CBAM scope, the proposed changes will also facilitate compliance with CBAM obligations. For instance, they propose to simplify the authorisation of declarants, the calculation of emissions, and the management of CBAM financial liability.

This will be coupled with measures making CBAM more effective, by strengthening anti-abuse provisions and developing a joint anti-circumvention strategy together with national authorities. 

The main proposed changes are:

• Tonnage threshold: to exempt importers if the net mass of the CBAM imported good does not exceed an annual threshold of 50 tons
• Liability: the authorized CBAM declarant can delegate the submission of the CBAM declaration to a third party (”CBAM representative”), but the authorized CBAM declarant will remain liable for all CBAM obligations
• System boundaries for emissions calculations: certain downstream processing emissions for aluminum and steel are excluded from the calculations, and precursors emissions are used for the calculations to align with EU ETS
• Verification: emissions based on default values do not need to be verified. The third-party accredited verification of embedded emissions applies only to actual values
• Exclusions: non-calcinated kaolinic clays are excluded from the goods’ scope
• Deadlines: the deadline for importers to submit their declarations is moved to August 31, 2027
• Carbon price paid in a third country: the carbon price paid in a third country, other than the country of origin, will count towards reducing the number of CBAM certificates to be surrendered
• Sale of CBAM certificates: the sale of CBAM certificates is deferred to February 1, 2027
• Certificate holding requirements: the quarterly requirement to hold CBAM certificates is reduced from 80% to 50% of the embedded emissions. Furthermore, the authorized CBAM declarant should be able to rely on the information submitted in the CBAM declaration in the previous year, for the same goods and third countries

More information on the Commission proposal

• Press release: Commission simplifies rules on sustainability and EU investments
•  Q&A Omnibus package
• Commission proposal to simplify and strengthen the CBAM
• Commission Staff Working Document Accompanying the Commission proposal
• Carbon Border Adjustment Mechanism EU website page: Carbon Border Adjustment Mechanism - European Commission

The package of legislative proposals will need to go through the EU legislative process and approval from the Parliament and the Council. The current Regulation continues to apply until the changes are approved into law.

British Marine will continue to watch the process and further guidance will be issued if or when these relaxations become legal.