Proposed Reforms to the EU CBAM

on this page, you'll find the main proposed simplifications to the eu cbam to read the full list of proposed amendments to the cbam regulation, please refer to the official text of the proposal (omnibus i com(2025)87), available here for any questions or remarks, feel free to contact our team at support\@carbonglance com what you should know in advance ⚖️ the european commission's proposed reforms must still be approved by the european parliament and the council to amend the eu cbam regulation as a result, the final version may differ from the initial proposal we’ll update this page with any adopted changes, so keep an eye on it! ⚠️ note in light of the above, we use "will" for stylistic clarity, not to suggest that the proposed reforms have already been approved our cbam tools will be updated to reflect any regulatory changes once they become official 💻 after reading this page, you can onboarding to our platform and explore our cbam tools for free! 🚧 threshold current threshold consignments in which the total intrinsic value of the cbam goods is above €150 proposed new threshold 50 tonnes of cbam goods per year per importer ⚓ this proposed new threshold aims to capture at least 99% of emissions in the scope of cbam this is possible because, according to customs import data from the first year of the transitional period, 10% of importers of cbam goods accounted for more than 99% of the emissions however, the commission will be empowered to adopt delegated acts to adjust this threshold, ensuring this environmental objective is preserved importers below this threshold will be exempt from cbam authorisation, declaration requirements, and the obligation to purchase cbam certificates however, they will need to monitor that they do not exceed the threshold over the year if an importer anticipates exceeding the new mass balance threshold of 50 tonnes per year, they must submit an application for an authorization for importers exceeding the threshold, the cbam declaration must also include the total quantity of imported goods that fall below the threshold note hydrogen and electricity are excluded from this proposal 💻 once this change is officially adopted, eu importers will be able to use our cbam tool for cbam declarants for free to determine if they exceed this threshold and conduct monitoring as "occasional cbam importers" 📝 definitions current definitions importer either the person lodging a customs declaration for release for free circulation of goods in its own name and on its own behalf or, where the customs declaration is lodged by an indirect customs representative in accordance with article 18 of regulation (eu) no 952/2013, the person on whose behalf such a declaration is lodged operator any person who operates or controls an installation in a third country proposed new definitions importer either the person lodging a customs declaration for release for free circulation of goods or a bill of discharge in accordance with article 175(5) of delegated regulation (eu) 2015/2446 in its own name and on its own behalf or, where the customs declaration is lodged by an indirect customs representative in accordance with article 18 of regulation (eu) no 952/2013, the person on whose behalf such a declaration is lodged operator any person that operates or controls an installation in a third country, including a parent company controlling an installation in a third country 🗓️ deadlines current deadlines for the definitive period annual submission of cbam declarations 31 may surrender of cbam certificates 31 may repurchase the authorised cbam declarant must submit the repurchase request by 30 june of each year during which cbam certificates were surrendered cancellation of cbam certificates on 1 july of each year, the commission will cancel any cbam certificates that were purchased during the year before the previous calendar year and that remained in the account of an authorised cbam declarant in the cbam registry those cbam certificates will be cancelled without any compensation proposed new deadlines for the definitive period annual submission of cbam declarations 31 august surrender of cbam certificates 31 august repurchase the authorised cbam declarant must submit the repurchase request by 30 september of each year during which cbam certificates were surrendered cancellation of cbam certificates on 1 october of each year, the commission will cancel any cbam certificates that were purchased during the year before the previous calendar year and that remained in the account of an authorised cbam declarant in the cbam registry those cbam certificates will be cancelled without any compensation cancellation of cbam certificates corresponding to the embedded emissions declared in 2027 for the year 2026 on 1 december 2027, the commission will cancel any cbam certificates that correspond to the embedded emissions declared in 2027 for the year 2026 those cbam certificates will be cancelled without any compensation 🏛️ authorisation procedure current rule before granting the status of authorised cbam declarant, the competent authority must conduct a consultation procedure on the application for an authorisation via the cbam registry the consultation procedure must involve the competent authorities in the other member states and the commission and must not exceed 15 working days proposed reform the consultation procedure will be optional the nca responsible for the authorisation decision will determine whether a targeted consultation with other ncas and/or the commission is necessary 🤝 cbam representatives authorised cbam declarants will be able to delegate the submission of cbam declarations to a third party while remaining liable for all cbam obligations, including the purchase and surrender of the correct number of cbam certificates these third parties will not need to apply for an authorisation but will have to meet specific technical criteria to access the cbam registry, such as holding an eori number and being established in a member state additional requirements will be set out in an implementing act ✅ verification current rule all embedded emissions must be verified, even if they are based on default values provided by the commission proposed reform only embedded emissions based on actual data must be verified 🖥️ cbam registry access operators under the proposed reforms to the eu cbam , it is clarified that the controlling entity of operators of third country installations, including the parent company, also qualifies as an manufacturers hence, it will become more evident that these entities can also access the share your cbam emissions and upload emissions data and verification reports for all installations of their subsidiaries and controlled entities at once the operator will be required to provide a corporate or activity registration number to ensure their identification verifiers accredited verifiers will have access to the cbam registry they will have to submit a request for registration in the cbam registry to the competent authority of the member state in which the national accreditation body is established 🕵🏼‍♂️ strengthened monitoring and enforcement the commission and national competent authorities (ncas) for cbam will share responsibility for monitoring occasional importers and identifying those who exceed the threshold if an nca informs national customs authorities that an importer has surpassed this threshold, those authorities will prohibit further imports of cbam goods by that importer until the end of the calendar year or until that importer has obtained the status of authorised cbam declarant occasional importers who exceed the threshold without previously obtaining an authorisation will also face penalties for the entirety of the imported goods these penalties will be of an amount from three to five times the standard penalties the cbam regulation will include strengthened anti abuse provisions, explicitly addressing cases of " artificial split of eori numbers " these are cases where importers artificially split their imports across subsidiaries or related entities, each with a different eori number when applying penalties, the competent authorities will be able to take into account the specific circumstances such as the intentional or negligent behaviour of the declarant this will allow for a reduction of the amount of the penalty where minor or unintentional errors are made the commission will monitor the robustness of the threshold in terms of circumvention risks, including through the biennial report reviewing the functioning of the cbam 🏭 emissions calculations exclusion of non calcined clay current rule the eu cbam scope includes "other kaolinic clays" (cn code 2507 00 80) in the list of cement goods both cement are included proposed reform non calcined kaolinic clays will be excluded from the cbam scope exclusion of indirect emissions of electricity current rule annex ii to the eu cbam regulation lists the goods for which only direct emissions have to be taken into account for the purpose of cbam the annex includes goods in the iron and steel , aluminium , and chemicals sectors for goods not listed in this annex, both direct and indirect emissions have to be taken into account for cbam purposes this is the case for goods in the cement and fertilizers sectors proposed reform electricity will be included in annex ii to explicitly clarify that the indirect emissions of electricity are not relevant for cbam conditions to use default values current rule the commission is empowered to adopt implementing acts concerning the application of the elements of the calculation methods set out in annex iv, including determining system boundaries of production processes and relevant input materials (precursors), emission factors, installation specific values of actual emissions and default values and their respective application to individual goods as well as laying down methods to ensure the reliability of data on the basis of which the default values shall be determined, including the level of detail and the verification of the data, and including further specification of goods that are to be considered as ‘simple goods’ and ‘complex goods’ for the purpose of point 1 of annex iv; those implementing acts must also specify the conditions under which it is deemed that actual emissions cannot be adequately determined , as well as the elements of evidence demonstrating that the criteria required to justify the use of actual emissions for electricity consumed in the production processes of goods for the purpose of paragraph 2 that are listed in points 5 and 6 of annex iv are met; and proposed reform the commission is empowered to adopt implementing acts concerning (a) the application of the elements of the calculation methods set out in annex iv, including determining system boundaries of production processes, which shall be limited to the system boundaries of production processes covered by the eu ets , and relevant input materials (precursors), emission factors, installation specific values of actual emissions and default values and their respective application to individual goods, as well as lay down methods to ensure the reliability of data on the basis of which the default values shall be determined, including the level of detail of the data, and including further specification of goods that are to be considered as ‘simple goods’ and ‘complex goods’ for the purpose of point 1 of annex iv those implementing acts must also specify the elements of evidence demonstrating that the criteria required to justify the use of actual emissions for electricity consumed in the production processes of goods for the purpose of paragraph 2 that are listed in points 5 and 6 of annex iv are met;’ explanation of this proposed simplification as shown above, the requirement to " specify the conditions under which it is deemed that actual emissions cannot be adequately determined " will be removed therefore, authorised cbam declarants will be able to freely choose between actual embedded emissions and/or default values with a mark up alternative default values current rule default values must be set at the average emission intensity of each exporting country, increased by a proportionately designed mark up this mark up must be determined in implementing acts and must be set at an appropriate level to ensure the environmental integrity of the cbam, building on the most up to date and reliable information, including on the basis of information gathered during the transitional period when reliable data for the exporting country cannot be applied for a type of goods, the default values must be based on the average emission intensity of the x % worst performing eu ets installations for that type of goods proposed reform the alternative default value will be set at the level of the average emission intensity of the ten exporting countries with the highest emission intensities for which reliable data is available this will be without prejudice to the possibility to adapt these default values based on region specific features explanation of this proposed simplification the problem witht the current approach is that even though the most relevant processes are covered by the eu ets, and emissions intensity data are available for those, this is not the case for some processes and goods the eu ets products benchmarks cover only 11 products that are relevant for cbam the cbam scope encompasses 569 different cn codes hence, some cbam goods are not covered by any product benchmark emission calculation for downstream processing current rule emissions occurring during the final production steps of aluminium and steel goods must be calculated this means that emissions from any external inputs (including 🔩 purchased cbam good ) or self generating heat and electricity need to be monitored by the operators of these factories proposed reform final production steps will be excluded from the system boundaries of the cbam for aluminium and steel goods as a result, the embedded emissions of these cbam goods will be calculated based solely on the emissions of 🔩 purchased cbam good and the quantity of these precursors required per tonne of output 💻 our platform can greatly simplify these calculations by enabling factory operators to 🔩 purchased cbam good all data on their 🔩 purchased cbam good and connect with other factories to automatically 🔩 purchased cbam good the embedded emissions of those precursors into their own cbam calculations try it for free! see an example of a factory of finished steel products with and without the proposed cbam reforms examples exemption of precursors produced in the eu current rule 🔩 purchased cbam good produced in the eu and exported to third countries for the production of cbam goods must be accounted for when determining the embedded emissions of cbam goods imported into the eu proposed reform 🔩 purchased cbam good produced in the eu will have zero attributed emissions however, the volumes and origins of these precursors will remain part of the monitoring of the installation for verification purposes see an example of a factory of finished steel products with and without the proposed cbam reforms examples 📈 cbam financial liability current rule authorised cbam declarants have to buy cbam certificates to ensure that, at the end of each quarter, they own a number of certificates which corresponds to at least 80% , calculated based on default values, of the emissions embedded in the goods they have imported since the start of the year proposed reform the 80% requirement will be lowered to 50% and the calculation base will change to either option 1 the use of public default values with a deduction of the mark up and of the corresponding free allocation option 2 the use of the number of cbam certificates that the authorised cbam declarant surrendered in the previous year for the same goods and third countries current rule the number of certificates subject to repurchase must be limited to one third (1/3) of the total number of cbam certificates purchased by the authorised cbam declarant during the previous calendar year proposed reform the 1/3 repurchase limit will be replaced by the number of certificates that declarants will be required to buy as a result of the cbam obligations in other words, authorised cbam declarants will be able to sell back all certificates that they were obliged to purchase according to the cbam regulation apply to the same year as the year of purchase (instead of the year before) 🏷️ sale of cbam certificates current rule from january 1, 2026, each member state will start selling cbam certificates through a common central platform to authorized cbam declarants based in that member state proposed reform authorized cbam declarants are not required to begin purchasing certificates on january 1, 2026 instead, they will start doing so in february 2027 to account for the emissions embedded in the cbam goods they imported throughout 2026 current rule the commission must calculate the price of cbam certificates as the average of the closing prices of eu ets allowances on the auction platform, for each calendar week proposed reform for the year 2026 , the commission must calculate the price of cbam certificates that corresponds to the embedded emissions declared in 2027 as the quarterly average of the closing prices of eu ets allowances on the auction platform, corresponding to the quarter when the goods were imported current rule the information on the sale, repurchase and cancellation of cbam certificates in the common central platform (ccp) should be transferred to the cbam registry at the end of each working day proposed reform the reference to certificates cancellation will be removed from the reference to information exchange from the ccp to the cbam registry 💲 carbon prices current rule if authorised cbam declarants claim a reduction in the number of cbam certificates to be surrendered due to a carbon price paid in the country of origin for the declared embedded emissions, they must prove that this carbon price has been effectively paid to do so, they must maintain records demonstrating that these emissions were subject to a carbon price in the country of origin they must also retain evidence of any rebates or compensation, including references to relevant legislation in that country all this information must be certified by a person that is independent from the authorised cbam declarants or the third country’s authorities finally, authorised cbam declarants must also keep evidence of the actual payment of the carbon price proposed reform the commission may, where applicable, establish default carbon prices per country, reflecting the average carbon price paid annually (in eur/tco2e) in such cases, any rebates or other form of compensation available in that country that would have resulted in a reduction of this default carbon price will be taken into account authorised cbam declarants may choose either to rely on the commission’s default carbon price or to claim a deduction for the carbon price effectively paid current rule an authorised cbam declarant may claim in the cbam declaration a reduction in the number of cbam certificates to be surrendered in order to take into account the carbon price paid in the country of origin for the declared embedded emissions the reduction may be claimed only if the carbon price has been effectively paid in the country of origin proposed reform carbon prices paid in countries other than the country of origin of the imported goods will also be eligible for deduction ➕ potential future scope extension although the future scope of cbam remains undecided, the proposed simplifications aim to facilitate its potential expansion to a wider range of sectors, particularly downstream products