On September 29th, 2025, the Council of the European Union adopted the CBAM Omnibus Proposal. This follows the European Parliament’s recent adoption of the inter-institutional agreement on the Proposal which had been reached in June.
The CBAM (or Carbon Border Adjustment Mechanism) aims to combat carbon leakage, which occurs when the EU’s climate legislation – particularly the carbon pricing in the ETS – leads to an increase of production and GHG emissions elsewhere in the world. Carbon leakage is an acute threat to EU industries and undermines the objective of the ETS. The CBAM imposes a levy on the embedded emissions of certain goods – such as aluminum, steel, iron, fertilisers or cement – which are imported into the EU.
The far-reaching changes to the CBAM, which are part of the EU’s broader efforts towards simplification, are now final. This Client Alert gives an overview of the key changes.
- The de minimis threshold exempting importers is significantly broadened.
Previously, CBAM had a goods-based threshold of EUR150 per consignment. This has been changed to an annual threshold of 50 tonnes of CBAM goods per year and per CBAM declarant. The threshold is designed to include 99% of the embedded emissions of goods within the scope of the CBAM while exclude 90% of importers of these products. This is a significant change which eliminates CBAM obligations for most SMEs and small importers, including the many EU consumers buying goods online who otherwise would have fallen within the scope of CBAM.
Importers that import less than 50 tonnes per year are relieved of all requirements under the CBAM (no declaration, no authorisation, no certificates to purchase). If importers have registered as declarant before 31 March 2026, they can still import above the threshold pending authorization.
- Default values no longer need to be verified.
Another significant simplification introduced by the Omnibus regulation is the removal of the obligation to have emissions certified by a third party when the embedded emission declared are the default values. This gives importers additional administrative and financial flexibility, as the CBAM Regulation had required verification by accredited third party verifiers of all declared emissions. Eliminating the mandated reliance on third party verifiers for default values thus relieves importers of a significant administrative burden. If the classification and customs origin of goods is known, importers will immediately be able to calculate the carbon price of their imports based on default values. Those default values applicable in the definitive period (as from 1 January 2026) are being prepared by the Commission and will be communicated before the end of the year.
- The alternative default value is set at a much more stringent level.
The alternative default value is used when reliable data is not available for a product group in a third country, meaning that the Commission cannot determine the appropriate default value based on the information it has been receiving from CBAM declarant since October 2023 (when the CBAM’s transitional phase started). The alternative value is now set at the level of the average emission intensity of the 10 exporting countries with the highest emission intensities. This increases the carbon leakage protection offered by CBAM, as well as the CBAM burden imposed on many imported goods.
- For third country carbon prices, default values are optionally introduced.
The carbon price paid in third countries can be deducted from the CBAM cost. To assist in the determination of the carbon price paid in the country of production, default prices are offered as an option. These default values will be based on yearly averages. If importers declare the actual emissions imbedded in the CBAM goods they import, they have the option to choose third country carbon price default values if actual data is unavailable. When importers choose to rely on default values to determine the embedded emissions, deductions of third country carbon prices must be based on the yearly average calculated by the Commission.
- Several deadlines have been extended.
CBAM certificates can only be bought from February 2027 onwards, which relieves CBAM Declarants of the obligation to buy CBAM certificates over the course of 2026. Moreover, the annual deadline to surrender CBAM declarations over the preceding year is further extended from 31 August to 30 September. As a consequence, the deadline to request the repurchasing of certificates was extended to 31 October, after which on 1 November all CBAM certificates that were not surrendered or sold back to the authority will be cancelled without compensation.
- The quarterly obligation to keep the CBAM Registry account level is set at 50% of embedded emissions, instead of 80%.
The obligation to purchase a minimum number of certificates is lowered from 80% to 50% of the imbedded emission. The percentage of embedded emissions can be calculated based on either default values or on the allowances surrendered for the previous year. In addition, unused CBAM certificates can be sold back to the authority up to that same level of 50% of embedded emissions (while previously the share that could be resold was no more than 30% of the purchase certificates). This significantly reduces the risk for CBAM declarant that they could be left with unused certificates that need to be cancelled after lodging their CBAM declarations.
- Exceptionally for next year, the 2026 CBAM certificate price is calculated based on the ETS price average for the quarter of importation.
CBAM certificate for imports made in 2026, which can only be purchased after February 2027, will be valued at the average price of the ETS during the 2026 quarter of importation. This deviates from the CBAM price calculation from 2027 onwards, when the CBAM certificate price is based on the time of purchase of the certificate and calculated based on the weekly ETS price average. Importantly, for 2026 this requires importers to keep track of the date of import of CBAM goods, to know which certificates can be bought when the sale of CBAM certificates starts in February 2027.
- Customs representatives acting as CBAM Declarants must be authorised, even if importers do not exceed the 50 tonnes de minimis
Indirect customs representatives which have agreed to act as CBAM Declarant for EU importers, or which act on behalf of non-EU importers – for which they will act as CBAM Declarant regardless of their consent – will have to be authorised as CBAM declarants, even if volumes of imports remain below the 50 tonnes de minimis threshold. Importers only have to register as CBAM Declarant if they expect to exceed the threshold. Penalties for importing CBAM goods without having being authorised as a CBAM declarant are three to five times higher than regular penalties. It is thus critical for representative to observe the obligation to be authorised.
In addition, indirect customs representatives should also monitor whether importers reach the de minimis threshold, to know whether further CBAM obligations will apply (purchase of CBAM certificates, CBAM declarations, etc.).
- Leniency in case of mistakes cause by third parties
Importantly, penalties will be leniently calculated in the case of mistakes due to third party information. This is a welcome change, which decreases the risk for importers. In addition, importers who exceed the threshold but have not registered as CBAM declarant, and who pay the penalties imposed upon them, are released of the obligation to register as CBAM declarant and surrender the outstanding certificates. The logic behind this is presumably that penalties for importing CBAM goods without having been authorised as CBAM Declarant are already EUR300-500 per non-surrendered certificate – which is likely to be several multiples of the total CBAM certificate cost (as the CBAM certificate price is unlikely to exceed EUR100 for the foreseeable future). It would thus not be necessary to impose both.
The legislative act adopting the CBAM Omnibus will be published in the Official Journal in the coming days, after which it comes into force in three days.
In sum, the key changes to CBAM are now final. Several important implementing acts are still to be adopted, including those on the calculation of emissions and the price of certificates.
In addition, the public consultation on three key implementing acts has just ended. These included those on emissions calculations and the determination of default values, the free allocation adjustment and the third country carbon price deduction.
Please do not hesitate to get in touch with Cassidy Levy Kent’s international trade team in Brussels, or your usual contact in any of Cassidy Levy Kent’s offices, with any questions.