At the end of February, the EC passed a new proposal package, referred to as Omnibus, to simplify EU rules, boost competitiveness, and unlock additional investment capacity. The main objective is “to deliver an unprecedented simplification effort by achieving at least 25% reduction in administrative burdens, and at least 35% for SMEs, until the end of this mandate.” A significant part of the package is the substantial amendment to the rules on the CBAM.
The interim period for introducing carbon tariff regulations started on Oct. 1, 2023. Since then, it has become clear that the administrative burden on importers from compliance with CBAM obligations significantly exceeds the environmental and regulatory advantages. The test period, lasting until the end of 2025, is there to identify precisely such design errors and teething problems, allowing time to make any necessary corrections.
The EC’s simplification plan is based on the finding that the largest importers are responsible for the vast majority of CO2 emissions in the form of embedded emissions. There is, therefore, no need to impose these obligations on all parties.
Under the package of proposals, smaller importers will be exempt from the administration, reporting, and purchasing quota obligations specified by the CBAM. This includes economic actors that import small quantities of goods and products subject to the mechanism into the EU, meaning their import activities result in only negligible amounts of embedded emissions.
An insignificant threshold of 50 tonnes would be introduced for exemption, equal to an average CO2 equivalent of 80 tonnes. Those importers whose annual imports of goods and products affected do not exceed this threshold would be exempted: CBAM obligations would be eliminated for approximately 182,000 or 90% of importers while still covering more than 99% of emissions.
The adopted package of proposals contains essential elements for those importers not exempted. Among other things, compliance with reporting requirements would be easier, and the authorization process would be simplified.
The method for determining default values in cases where no reliable data is available in the exporting country will also become simpler. In this case, the default value will be the average emissions intensity of the 10 exporting countries with the largest emissions for which reliable data is available.
The package of proposals even provides sufficient time for the companies in question to prepare for compliance. The sale of CBAM certificates for emissions embedded in goods imported in 2026 would start a year later than planned, in 2027. The cost of the certificates purchased in 2027 will also reflect the 2026 prices of EU ETS emissions units.
This article was first published in the Budapest Business Journal print issue of April 4, 2025.
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