In this article you will find a number of the most important proposals. Please note that these proposals still have to go through a formal procedure before the changes come into effect.
The CBAM applies to companies that import products with high CO₂ emissions into the EU, such as steel, iron, cement, aluminium, electricity and fertiliser. These companies are required to pay a CO₂ tax on emissions released outside the EU during the production of these goods. This EU measure was introduced to prevent companies from moving their production to countries outside the EU where less strict environmental regulations apply.
The Omnibus Directive proposes several changes to the CBAM Regulation. Such as a reduction in the number of parties to which CBAM applies. It has also been proposed to make reporting easier.
The underlying idea is that a large group of importers now have a considerable administrative burden, while they import small quantities of CBAM goods. In other words: it costs these importers a lot of time and effort to collect and report all the necessary information. According to the European Commission, these administrative burdens do not outweigh the environmental benefits.
The European Commission proposes to apply the CBAM only when the imported quantity of steel, iron, aluminium, fertiliser and cement exceeds 50 tonnes. This does not apply to hydrogen and electricity.
The European Commission expects that this implies that only 10% of the current amount of importers will have the CBAM reporting obligations. This limited group is responsible for 99% of the CO₂ emissions.
These are the main simplification measures for importers:
After the initiation of the final system in 2026 an importer must report the CO₂-emissions on an annual base. The draft proposes to prolong the reporting deadline; from the end of May until the end of August. As an importer, this means that you will have more time to collect the information about the previous year.
Until the third quarter of 2024, the importer can use default values that were published by the EU. Starting the third quarter of 2024, one must report based on actual values. The proposal is to give importers a choice to use default values again. It is expected that this will facilitate the reporting.
Under the current rules – when applying actual values – an independent party must verify the emission values. The costs of such verification are to be paid by the importer.
As this verification can be a difficult process, it is proposed that no verification is required if an importer uses default values. This will give you more flexibility and time to file the report. Please note that using default values also has a cost-reducing effect when meeting the CBAM obligations.
At this moment, the importer must submit the report by itself. You cannot - or only indirectly – use a third-party service provider whilst filing.
The proposal would give importers the opportunity to lay the reporting obligations in the hands of third-party service providers. In that case, you do not need to file yourself. Of course, you remain responsible for timely and correct reporting.
At present, embedded emissions of certain [MOU1] [MV2] aluminium- and steel products fall within the scope of CBAM. In general, however, the emissions that take place during production is in general relatively low.
The EU Commission proposes to exclude these production processes from the emission calculation. As a result, the administrative burden for producers outside the EU will diminish.
Based on the current legislation, an importer must throughout the years have a coverage of at least 80% of the CO₂-emissions by means of purchasing CBAM certificates. The national competent authority (NEa) may repurchase at the most a third of the - in the previous year acquired - certificates.
As this may have financial effects for the importer that cannot be expected upfront, it has been proposed to reduce this ratio to a coverage of 50%. Also, the limitation of the repurchasing of certificates shall disappear to a large extent. For 2026, a different arrangement will be in place, under which the certificates for 2026 can only be acquired in 2027.
When determining the number of certificates to be sold, an entrepreneur may reduce the financial burden by deducting the CO₂-levies that (the supplier of) the supplier has already paid outside of the EU.
As there may be many parties involved in the import process, one cannot always exactly determine the paid levies. An example: goods that are being imported from China, may have parts in them for which in other countries already CO₂-levies have been paid.
The proposal is to create a reduction for the CO₂-levies paid in these other countries. In that respect, one may use country data to be published by the EU. Should this proposal enter into force, then it becomes even more important to chart the production chain of the CBAM goods for importers. This may reduce the burden of the CBAM payable.
In a nutshell: when the proposed Omnibus Directive enters into force and you import annually less than 50 tons of steel, iron, aluminium, fertilizer or cement, you will not have to file any report.
What if you must file a report? Then you have two options:
If a reduction of the burden is required, then the CO₂-levies paid abroad should be clearly taken into consideration.
Good to know: if during a calendar year, the imported quantity of CBAM goods exceeds 50 tonnes; you must obtain, as soon as the threshold has been exceeded, the status of the authorised reporter. If you do not have that status, the competent authorities may impose fines and no imports of CBAM goods can be performed.
The above-described adjustments at present are not more than a proposal from the European Commission to the European Parliament. Later this year, this will be debated and may suggest amendment proposals. This could be an expansion, but also a limitation of the Omnibus proposal.
After the debate and the negotiations with the European Parliament, the final proposal will be submitted to the Council of Ministers. Once they have approved the (amended) proposal, it will be published in the EU Gazette. It could be expected that the adjustments will be finalised this year, making the proposal enter into force on January 1, 2026. For more information about the Omnibus, read our previous articles.
Do you need any assistance when determining the impact of the CBAM adjustment proposals for your company? Or do you have any other questions about this topic? Feel free to mail or call us: we are ready to assist.
