Simplifying and strengthening Carbon Border Adjustment Mechanism

The Carbon Border Adjustment Mechanism (“CBAM”) is a carbon border tariff that will oblige European Union (“EU”) importers of goods to buy certificates corresponding to the carbon price that they would have paid if the goods had been produced in line with EU carbon pricing rules. However, during the transitional period ending on December 31, 2025, importers of goods must inform of the greenhouse gas emissions caused by their imports, without being subject to any payment or adjustment. You can consult our previous posts where we have analyzed this matter: Post | Carbon Border Adjustment Mechanism, and Post | The new Carbon Border Adjustment Mechanism (CBAM).

Recently, the European Parliament and the Council adopted Regulation (EU) 2025/2083, (“the Regulation”) published on October 17, 2025, amending Regulation (EU) 2023/956 as regards simplifying and strengthening the CBAM. This reform—which we already announced in our Post | CBAM simplification proposal—responds to the experience acquired during the transitional period that started in October 2023 (ending on December 31, 2025), and to the need to guarantee the effective implementation of the CBAM from January 1, 2026. The aim is to reduce administrative burden for the operators, ensuring environmental protection on imports of carbon-intensive products.

Main new developments

De minimis exemption and single mass-based threshold

The de minimis exemption was introduced for importers of small quantities of goods included in the context of the CBAM (iron and steel, aluminum, fertilizers and cement), establishing an annual threshold of 50 tonnes of net mass per importer. Those that do not reach this threshold are exempt from the CBAM obligations, enabling them to substantially reduce the administrative burden without compromising the climate objective. This is because the CBAM continues to apply to at least 99% of emissions embedded in the imported goods. The exemption does not apply to electricity and hydrogen imports, sectors that have different commercial characteristics and emission intensities.

Authorization procedures and customs management

The Regulation reinforces authorization procedures for importers and indirect customs representatives, who must obtain the status of authorized CBAM declarant before reaching the mass threshold. There is the possibility of delegating the submission of the CBAM declaration to third parties, with the CBAM declarant remaining responsible for submitting the declaration. The Regulation also establishes monitoring and control mechanisms to avoid circumvention through the artificial splitting of consignments, and clarifies the powers of customs and competent authorities regarding data management and penalties.

Simplifying the calculation and verification of emissions

The methods for calculating embedded emissions have been harmonized, enabling the use of default values when reliable data for the exporting country does not exist. Certain stages of aluminum and steel production are excluded to align with the EU emissions trading system. Verification of emissions is only mandatory when actual values are used, simplifying the process for operators.

Deduction of carbon price paid in third countries

The Regulation facilitates the deduction of the carbon price paid in the country of origin or in third countries, enabling a reduction in the number of CBAM certificates to be surrendered. Procedures have been established to independently certify documents and to use default carbon prices where applicable.

Managing CBAM registry and central platform

The CBAM registry management has been strengthened, including the registration of operators of installations in third countries and accredited verifiers, as well as access for parent companies and controlling entities. The costs of the central platform for selling and repurchasing CBAM certificates will be financed by fees payable by authorized declarants, with control mechanisms to avoid undue administrative costs.

Deadlines and obligations for submitting declarations and surrendering certificates

The deadline to submit the annual CBAM declaration and to surrender certificates has been extended to September 30 of the year following the importation of goods. The percentage of certificates on the declarant’s account at the end of each quarter has been adjusted to 50% of the embedded emissions.

Penalty procedure

The penalty procedure has been adapted to enable reductions in the penalty amount where minor or unintentional errors are made. The penalty payment releases the importer from the obligation to submit a declaration and surrender certificates for the imports involving an infringement.

Other relevant amendments

Non-calcined kaolinic clays have been excluded from the CBAM’s scope of application. Electricity has been added to Annex II, where goods with only direct emissions—not indirect—are taken into account when calculating embedded emissions.

The methods for determining default values have been simplified, and there is a possibility of adapting these values based on region-specific features.

The Commission has been empowered to adopt delegated acts and implement thresholds and fees, as well as manage the central platform.

Conclusion

The Regulation represents significant progress in simplifying and strengthening the CBAM and balancing the reduction in administrative burden for operators with environmental protection and system integrity.

The new provisions will be progressively applicable from January 1, 2026, consolidating the EU’s commitment to reducing global emissions and fighting against carbon leakage.