EU Parliament Endorses CBAM Simplification to Address Carbon Leakage
Members of the European Parliament support technical amendments to streamline the Carbon Border Adjustment Mechanism.
The European Parliament’s Committee on the Environment, Climate Change and Food Safety endorsed the European Commission's proposal on May 13, 2025, aimed at simplifying the existing framework of the Carbon Border Adjustment Mechanism (CBAM).
This initiative is part of the broader 'Omnibus I' simplification package introduced on February 26, 2025. The committee’s decision reflects a consensus to limit changes to mere technical clarifications, thus supporting a new de minimis mass threshold of 50 tonnes.
This threshold is anticipated to exempt approximately 90% of importers, predominantly small and medium-sized enterprises and individual importers, who engage in smaller-scale imports of CBAM goods.
The ongoing environmental objective of the CBAM remains intact, as the regulations will continue to cover 99% of total CO2 emissions attributed to imports of key materials including iron, steel, aluminium, cement, and fertilisers.
The latest changes aim to enhance the authorization processes for declarants—those intending to import goods that fall under CBAM guidelines—while also streamlining emissions calculations and clarifying financial liabilities associated with CBAM, alongside bolstering anti-abuse provisions.
Antonio Decaro, the rapporteur for the proposal, noted after the vote that the majority in the committee prioritized technical amendments aligned with the Commission's initial proposals, emphasizing the importance of preserving the integrity of the CBAM to prevent carbon leakage.
The committee voted in favor of the amendments with 85 votes for, 1 against, and 1 abstention.
The full Parliament vote to adopt the mandate for negotiations with the Council regarding the legislation is scheduled for May 22, 2025.
The EU’s CBAM serves as a mechanism to align the carbon pricing of EU products produced within the EU emissions trading system (ETS) with that of imported goods.
This initiative also aims to promote increased climate ambition among countries outside the European Union.
An assessment by the Commission regarding the potential extension of CBAM to additional ETS sectors at risk of carbon leakage is anticipated in early 2026.
This initiative is part of the broader 'Omnibus I' simplification package introduced on February 26, 2025. The committee’s decision reflects a consensus to limit changes to mere technical clarifications, thus supporting a new de minimis mass threshold of 50 tonnes.
This threshold is anticipated to exempt approximately 90% of importers, predominantly small and medium-sized enterprises and individual importers, who engage in smaller-scale imports of CBAM goods.
The ongoing environmental objective of the CBAM remains intact, as the regulations will continue to cover 99% of total CO2 emissions attributed to imports of key materials including iron, steel, aluminium, cement, and fertilisers.
The latest changes aim to enhance the authorization processes for declarants—those intending to import goods that fall under CBAM guidelines—while also streamlining emissions calculations and clarifying financial liabilities associated with CBAM, alongside bolstering anti-abuse provisions.
Antonio Decaro, the rapporteur for the proposal, noted after the vote that the majority in the committee prioritized technical amendments aligned with the Commission's initial proposals, emphasizing the importance of preserving the integrity of the CBAM to prevent carbon leakage.
The committee voted in favor of the amendments with 85 votes for, 1 against, and 1 abstention.
The full Parliament vote to adopt the mandate for negotiations with the Council regarding the legislation is scheduled for May 22, 2025.
The EU’s CBAM serves as a mechanism to align the carbon pricing of EU products produced within the EU emissions trading system (ETS) with that of imported goods.
This initiative also aims to promote increased climate ambition among countries outside the European Union.
An assessment by the Commission regarding the potential extension of CBAM to additional ETS sectors at risk of carbon leakage is anticipated in early 2026.
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