EU Institutions Advance Legislative Process to Simplify CBAM
European institutions advance key reforms to simplify CBAM, while industry stakeholders raise concerns over benchmarks and cost clarity. Sandbag calls for CBAM expansion, and Ukraine seeks a postponement to avoid economic hardship.
At a Glance:
- EU Institutions Advance Legislative Process to Simplify CBAM
- Third Informal Expert Group Meeting Discusses CBAM Implementation
- EUROMETAL Urges Swift Establishment of CBAM Benchmarks
- Sandbag Advocates for CBAM Expansion
- Ukraine Appeals for CBAM Implementation Postponement
EU Institutions Advance Legislative Process to Simplify CBAM
On May 22, the European Parliament approved the simplifications proposed by the European Commission to the EU CBAM, including the introduction of a new de minimis mass threshold of 50 tonnes of CBAM-covered goods per importer per year. This change aims to exempt 90% of importers from the mechanism while maintaining the policy's environmental integrity, as it would still capture over 99% of emissions from iron, steel, aluminium and cement imports.
On May 27, the Council of the European Union (the Council) adopted its negotiating position on the CBAM simplification proposals, paving the way for trilogue discussions.
The Council supports the main reforms proposed by the Commission. These include: a new de minimis threshold; excluding embedded emissions from finishing processes that are not covered by the EU ETS; and, for complex goods, excluding precursor emissions that are already covered by the EU ETS or a linked carbon pricing system. The Council also supports using default carbon prices, allowing importers to deduct carbon prices paid in third countries (other than the country of origin), and lowering the number of CBAM certificates authorised declarants need to hold at the end of each quarter from 80% to 50%.
However, the Council asks for more flexibility when granting authorised CBAM declarant status at the start of 2026, acknowledging the anticipated high volume of applications. It suggests that importers and indirect customs representatives who apply by 31 March 2026 should be allowed to keep importing during 2026—even if they exceed the threshold—while waiting for authorisation.
It also recommends that paying the penalty for exceeding the threshold without authorisation should waive the obligation to submit a CBAM declaration and surrender CBAM certificates for those imports. Finally, the Council supports reducing the penalty if the threshold is exceeded by no more than 10%.
The full position of the Council on the proposed reforms can be consulted here.
Third Informal Expert Group Meeting Discusses CBAM Implementation
On May 15, the EU Commission's Directorate-General for Taxation and Customs Union (DG TAXUD) convened the third meeting of the Informal Expert Group on CBAM.
The session focused on the proposed CBAM simplifications, general updates on 2025 activities, such as studies and planned deliverables, the extension of the CBAM scope to downstream products, and the revision of the CBAM methodology, among other topics.
EUROMETAL Urges Swift Establishment of CBAM Benchmarks
During the aforementioned informal expert group meeting, EUROMETAL—representing European steel, pipe, and metal distributors—voiced serious concerns about the absence of defined CBAM benchmarks and the uncertainty surrounding the average EU Emissions Trading System (ETS) price for 2026.
EUROMETAL President Alexander Julius warned that this lack of clarity could impose significant and unpredictable cost burdens on the European manufacturing industry. To mitigate these risks, EUROMETAL called for the swift establishment of moderate and realistic benchmarks.
Sandbag Advocates for CBAM Expansion
On May 22, climate think tank Sandbag released a position paper urging the European Commission to expand the EU CBAM both horizontally—to include a broader range of products—and vertically—to cover key precursors such as coke, lime, and ferro-silicon, as well as international transport emissions.
This proposed expansion aims to close existing emissions gaps and support the phase-out of free allocations under the EU ETS, which currently fails to effectively incentivize decarbonization.
The paper also recommends addressing the "scrap loophole" by tracing emissions from pre-consumer scrap back to production facilities and applying default values for post-consumer scrap. Additionally, it advocates for including upstream processes in the aluminium sector, such as alumina refining and pre-bake anode production, to ensure comprehensive carbon pricing.
Ukraine Appeals for CBAM Implementation Postponement
The Ukrainian League of Industrialists and Entrepreneurs (ULIE) has officially appealed to the European Union to postpone the implementation of CBAM for Ukrainian exports.
ULIE warns that without a transitional period or exemptions, the mechanism could cost Ukrainian producers over €1 billion annually, severely impacting energy-intensive sectors such as metallurgy, cement, and chemicals. The association calls for economic solidarity from European partners, stating that Ukraine is defending not only its own security but also that of Europe.
Planning Ahead: Becoming an Authorised CBAM Declarant
With these significant developments in the CBAM landscape, businesses importing CBAM goods into the EU should start preparing for the definitive phase. To help you navigate the authorization process, we've published a new blog post on the information and documents required to submit a CBAM Application.