Brussels Narrows CBAM to the Big Importers: A 50-Tonne Threshold Removes 90% of Filers and Keeps 99% of Emissions

On 26 February 2025 the European Commission published its first "omnibus" simplification package, a set of proposals to reduce reporting burdens on companies. One of the most concrete changes concerns the carbon border adjustment mechanism, or CBAM, the levy on the embedded emissions of certain imports that is due to move from a reporting-only transitional phase to its definitive phase in January 2026. Importers bringing in less than 50 tonnes a year of iron and steel, aluminium, fertilisers and cement combined would be exempt from CBAM obligations.

During the transitional phase, which began in October 2023, importers have had to file quarterly reports on the embedded emissions of their CBAM goods without paying anything. The existing de minimis rule was based on consignment value, exempting shipments worth less than 150 euros. The proposal does not change the sectors covered, the link to the EU emissions trading system, or the timetable for phasing out free allocation to EU producers in the same sectors.

Electricity and hydrogen imports are treated separately and are not covered by the 50-tonne threshold. The Commission has said a broader review of CBAM, including possible extension to downstream products and measures to address the risk of circumvention, will follow later in 2025. CBAM is not an energy tax, but it interacts with energy markets in three ways. Second, CBAM on electricity applies directly to power trade with non-EU neighbours. Third, CBAM revenue and the phase-out of free allocation affect the supply-demand balance in the EU ETS itself.

The cost of CBAM to importers depends on the EU allowance price, which has traded in a wide band over the past two years as industrial output, gas prices and power sector emissions have shifted. The omnibus proposal must be agreed by the European Parliament and the Council before it can take effect. The Commission has also said it will monitor whether the threshold stays consistent with the objective of covering nearly all embedded emissions, and could adjust it if needed.