Antonio Decaro, the rapporteur on the issue, emphasized the importance of the CBAM in preventing carbon leakage and promoting climate action beyond the EU.

These simplifications are part of the Commission's 'Omnibus I' package, which aims to reduce red tape and improve the overall business environment.

On June 18, 2025, the European Parliament and the Council of the EU reached a provisional political agreement regarding the Carbon Border Adjustment Mechanism (CBAM).

The new CBAM regulation introduces a minimum threshold of 50 tonnes per importer annually, which exempts approximately 90% of importers, primarily small and medium-sized enterprises (SMEs).

EU Climate Commissioner Wopke Hoekstra highlighted that while 90% of companies will be exempt from CBAM rules, the mechanism will still cover 99% of emissions from key sectors.

The proposal aims to simplify compliance and reduce costs for businesses, particularly SMEs, without compromising the EU's climate goals.

The simplification efforts are designed to reduce administrative burdens and compliance costs for EU companies while ensuring that the climate objectives of the CBAM are met.

Key changes include streamlined authorization procedures, enhanced data collection, and clearer rules for emission verification and financial responsibilities for importers.

This decision was finalized just over one hundred days after the initial proposal was made on February 26, 2025, showcasing the EU's commitment to rapid regulatory reform.

The CBAM focuses on sectors such as cement, iron and steel, aluminum, fertilizer, electricity, and hydrogen, requiring importers to report the volume of imported products and their associated greenhouse gas emissions.

The definitive phase of CBAM is set to commence on January 1, 2026, with a comprehensive review of the mechanism planned for later in 2025.

Before the regulation can take effect, it must be formally adopted by the European Parliament and the Council, which is expected to occur by September 2025.