On October 20, 2025, Regulation (EU) 2025/2083 of the European Parliament and of the Council entered into force, marking the first formal revision of the EU Carbon Border Adjustment Mechanism (CBAM). The amendments introduce a new de minimis exemption, extend key compliance deadlines, and streamline verification and reporting obligations as part of the European Commission’s wider effort to simplify Green Deal legislation while preserving the integrity of the Union’s climate goals.

Imposing a carbon cost on imports

The CBAM Regulation, adopted in May 2023, was designed to curb carbon leakage by imposing a carbon cost on imports of carbon-intensive goods, such as cement, fertilizers, iron and steel, equivalent to that faced by EU producers under the Emissions Trading System (ETS).

A transitional period began on October 1, 2023, requiring quarterly emissions reporting but no financial payments. The definitive regime, under which importers must purchase and surrender CBAM certificates, will start on January 1, 2026.

In November 2024, Commission President Ursula von der Leyen announced a “simplification revolution” to reduce administrative burdens across the Green Deal. The first Omnibus Simplification Package, published on February 26, 2025, included a CBAM streamlining proposal. Political agreement between the Parliament and Council followed on June 18, 2025, with final adoption on September 29, 2025, and publication in the Official Journal on October 17, 2025.

Key amendments to the CBAM Regulation 

Single mass-based de minimis exemption

The previous €150-per-shipment trigger is replaced by a 50-tonne annual threshold per importer. Importers whose total yearly imports of CBAM goods (cement, fertilizers, iron and steel, and aluminum) do not exceed 50 tonnes are now exempt from CBAM reporting, declaration, and certificate-surrender obligations.

The exemption does not apply to electricity or hydrogen, where market structures differ. If an importer exceeds the 50-tonne threshold at any point during the year, all imports for that year become subject to CBAM obligations.

Annual review mechanism

To preserve environmental coverage, the Commission will review the threshold annually to confirm that at least 99 percent of embedded emissions remain in scope. If that target is not met, the threshold may be adjusted by delegated act, effective from January 1 of the following year.

Authorization of CBAM declarants

Importers expecting to exceed the threshold must apply for authorized CBAM-declarant status before doing so. Applications filed by March 31, 2026, will allow continued imports while approval is pending.

Authorized declarants may delegate the filing of CBAM declarations to EU-established third parties holding an EORI number, but remain responsible for compliance. Indirect customs representatives acting in that capacity will also assume the same obligations and potential penalties.

Reporting, declaration and certificate-management timelines

The deadline for the annual CBAM declaration and certificate surrender moves from May 31 to September 30 of the following year, giving importers additional time to verify data and acquire certificates.

The quarterly requirement to hold certificates equal to 80 percent of embedded emissions is reduced to 50 percent, easing liquidity pressure.

Sales of CBAM certificates through the EU’s central platform will now begin in February 2027, covering emissions from 2026 imports. Certificates purchased in 2027 will be priced using the average 2026 EU ETS allowance value.

Calculation and verification of embedded emissions

Importers may continue to report either verified actual values or default values published by the Commission. Verification by an accredited verifier is required only when using actual values.

Where reliable country-specific data are unavailable, default values will be based on the average emission intensity of the ten highest-emitting exporters, adjusted for regional factors. From 2027, the Commission will also publish default carbon-price references for third-country regimes, enabling declarants to deduct verified or default prices already paid abroad.

Enforcement and penalties

During the CBAM transitional period, enforcement primarily aimed at facilitating learning and improving operators’ compliance, with no publicly reported cases of penalties being imposed. In the definitive phase, Member State authorities are expected to intensify oversight and closely monitor adherence to CBAM obligations. Customs authorities will gradually implement CBAM controls through the EU Customs Single Window, resulting in automated compliance checks at the border. Imports within scope that are not declared by an authorized CBAM declarant will be refused customs clearance.

The penalty regime mirrors the ETS’s €100/tCO₂ for non-compliance. Importers exceeding the threshold without authorization may face penalties up to five times that amount.

Sectoral and technical clarifications

Targeted adjustments refine the Regulation’s scope. Non-calcined kaolinic clays are removed from Annex I due to low carbon intensity, while electricity is added to Annex II so that only direct emissions are counted. Electricity and hydrogen produced within a Member State’s exclusive economic zone are excluded to prevent disproportionate barriers to internal trade.

Looking ahead

Businesses importing carbon-intensive goods into the EU should monitor developments closely ahead of the definitive CBAM phase beginning January 1, 2026. The CBAM Simplification Regulation is part of the series of reforms under the EU Competitiveness Compass, and further delegated and implementing acts are expected in 2026.