EU Eases CO2 Tax Burden on SMEs with Revised CBAM Rules

Most SMEs and small importers in the EU will be excluded from the CO2 tax provided for by the CBAM (Carbon Border Adjustment Mechanism) regulation. This is what the Council of the European Union and the European Parliament have decided, following the proposals of the Omnibus I package, to find an agreement on the simplification of the European carbon tax, namely the CBAM (in Italian Carbon Border Adjustment Mechanism).

The aim of the new legislative text is to make the application of the CBAM simpler and less costly, without weakening its climate objectives. In fact, according to what the EU institutions declare, 99% of the emissions embodied in goods imported into the EU will continue to be covered. In essence, therefore, the new proposal should reduce bureaucracy and compliance costs for European companies, in particular for small and medium-sized enterprises (SMEs).

“The provisional agreement reached today with the Parliament is another important step towards easing the administrative burden on businesses and strengthening the EU’s competitiveness,” said Adam Szłapka, Polish Minister for the European Union.

The final adoption of the new text is expected by September 2025, following formal approval by the EU Council and the European Parliament.

Key points of the EU agreement

The co-legislators have maintained the core principles of the Commission’s proposal to simplify the CBAM rules, in particular by introducing a broader “de minimis” exemption: companies that do not exceed the threshold of 50 tonnes of goods imported per year will be exempted from the CBAM obligations. This new threshold will replace the current, more restrictive rules that only exempt goods of negligible value. In practice, this change should exempt from the CBAM obligations most SMEs and individuals importing minimal quantities of goods covered by the Regulation.

Furthermore, the revision will allow European importing companies to continue trading in goods subject to the CBAM even in early 2026, while they await official registration, thus avoiding disruptions in their activities.

The agreement also includes other simplification measures for all importers above the threshold, including a simplified authorisation procedure; more efficient data collection processes; clearer ways to calculate and verify embodied emissions; simplified rules for determining the financial responsibility of importers during the year; and the possibility to claim recognition of costs incurred for carbon already paid in non-EU producing countries.

A common ground was also found regarding sanctions and rules for indirect customs representatives. Finally, the text contains additional clarifications on the management and financing of the central CBAM platform, which will be used for the sale of CBAM certificates to importers.

Why the Europen Union revised the CO2 tax

The revision of the CBAM regulation follows the proposals contained in the two Omnibus legislative packages, published on February 26th, 2025 by the Commission and aimed at simplifying existing regulations in the areas of sustainability and investment.

The push for simplification has been driven in recent months by institutions and Member States and comes in response to the challenges highlighted in the reports by Enrico Letta (“Much more than a market”) and Mario Draghi (“The future of European competitiveness”) to which the EU Council has asked to give top priority.

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(Featured image by Jas Min via Unsplash)

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First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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