The EU’s Carbon Border Adjustment Mechanism (CBAM) is intended to equalise the price of carbon paid for EU products operating under the Union’s Emissions Trading System (ETS) with that of imported goods. With effect from 20 October 2025, the European Commission has introduced an amendment to the rules governing CBAM which will, it claims, mean that 99% of carbon dioxide (CO2) emissions from iron, steel, aluminium and cement imports will still be covered while 90% of importers will now be exempt from the CBAM rules.
Regulation (EU) 2025/2083 explains that it is taking action because data collected so far on the impact of CBAM shows that only a small proportion of importers account for the vast majority of emissions embedded in imported goods.
The amended law sets a new de minimis mass threshold whereby imports up to 50 tonnes of CBAM-covered goods per importer per year will not be subject to CBAM rules. This measure is expected to exempt approximately 182,000 importers, mostly SMEs and individuals.
The rules on imports still covered by the CBAM are also simplified, with regard to the authorisation process, the calculation of emissions, verification rules and the financial liability of authorised CBAM declarants.
A spokesperson for the European Parliament said: “As the CBAM will still cover 99% of total CO2 emissions, we have maintained the EU’s environmental ambitions and remain fully committed to a just transition and to achieving climate neutrality by 2050.”
In early 2026, the European Commission will assess whether to extend the scope of the CBAM to other ETS sectors and consider how to help exporters of CBAM products at risk of carbon leakage.
The UK Government has said that it will introduce a CBAM by 2027 and it is reportedly in consultation with the European Commission to bring the two systems into closer alignment.
