On 20 October 2025, the EU ushered in a new chapter for its climate policy with the adoption of the amended regulation on the Carbon Border Adjustment Mechanism (CBAM). As part of the sweeping “Omnibus” legislative package, the changes are designed to simplify the regulatory landscape, reduce administrative burdens on smaller businesses and strengthen CBAM’s role as a cornerstone of the EU environmental agenda.
CBAM is about fairness: ensuring that imported goods bear the same carbon costs as those produced in the EU, thereby preventing carbon leakage and protecting European industry. However, the CBAM system, introduced in its transitional phase in 2023, was criticized for its complexity. The revised regulation reduces aims to strike a balance—maintaining environmental integrity while making compliance more manageable, particularly for small importers and exporters (for prior coverage, see the article in the October 2023 issue of Indirect Tax News).
The main changes to the CBAM regulation are a new exemption threshold, allowing CBAM declarants to delegate the declaration obligation, simplifying the calculations and extending the deadline for submitting declarations. The Commission has announced its intention to extend CBAM to additional ETS (Emission Trading System) sectors and downstream goods starting from 2026.
One of the most notable changes to the CBAM regulation is the introduction of a new and clearer de minimis exemption. Previously, exemptions were based on the value of imports, capped at EUR 150. Now, importers of cement, iron and steel, fertilizer and aluminium sectors are exempt from CBAM obligations if their annual quantity of imports is below 50 tonnes. This shift is significant according to the European Commission; it will exempt around 90% of importers from CBAM obligations, while still covering 99% of emissions—welcome relief for small and medium-sized businesses (SMEs). Electricity and hydrogen remain outside the exemption.
The role of the authorised CBAM Declarant remains a fundamental component of CBAM. Importers of CBAM goods with the status of authorised declarant remain responsible for emissions reporting, certificate management and recordkeeping. Importers whose imports exceed the 50 tonnes annual threshold and customs representatives of non-EU established entities falling within the scope of the regulation must apply for declarant status, providing evidence of tax compliance, financial capacity and organisational readiness.
The amended regulation allows CBAM declarants to formally delegate to third parties their obligation to submit CBAM declarations, but ultimate responsibility remains firmly on the declarant.
The amended regulation reduces the operational complexity of CBAM. CBAM declarants are free to choose to report actual emissions verified by accredited bodies or they can rely on default values provided by the European Commission. There is no external verification requirement where default values are chosen.
The regulation acknowledges carbon pricing policy in third countries, recognising efforts made outside the EU and integrating them into CBAM calculations.
The amended regulation extends the deadline for submitting annual CBAM declarations and surrendering CBAM certificates from 31 May to 31 August each year, with the first deadline set at 31 August 2027.
The sale of CBAM certificates, originally scheduled for 1 January 2026, has been postponed to 1 February 2027. During 2026, companies will report emissions without surrendering certificates, with prices determined quarterly and payments deferred to 2027. As from the first quarter of 2027, at least 50% of CBAM certificates in the declarant’s account in the CBAM registry must be available at the end of each quarter, reducing the burden compared to the previously required 80% threshold.
Reporting deadlines are also redefined to ensure adequate time for data collection, emission verification and certificate acquisition:
For businesses, the message is clear. The EU is committed to expanding CBAM to additional sectors and downstream goods as from 2026, so companies should begin preparing now. That means reviewing supply chains, mapping import flows and deciding whether to use actual emissions data or default values. It also means ensuring that internal processes and declarant applications are in place well ahead of the new deadlines.
The simplified CBAM regulation represents a turning point. It is friendlier to SMEs, more predictable for larger importers and still robust in its environmental coverage. Companies that act early will not only avoid disruption but may also find themselves at a competitive advantage, demonstrating compliance and sustainability in a global marketplace that increasingly values both.
Guido Calderaro
Paola Levato
BDO in Italy
CBAM is about fairness: ensuring that imported goods bear the same carbon costs as those produced in the EU, thereby preventing carbon leakage and protecting European industry. However, the CBAM system, introduced in its transitional phase in 2023, was criticized for its complexity. The revised regulation reduces aims to strike a balance—maintaining environmental integrity while making compliance more manageable, particularly for small importers and exporters (for prior coverage, see the article in the October 2023 issue of Indirect Tax News).
The main changes to the CBAM regulation are a new exemption threshold, allowing CBAM declarants to delegate the declaration obligation, simplifying the calculations and extending the deadline for submitting declarations. The Commission has announced its intention to extend CBAM to additional ETS (Emission Trading System) sectors and downstream goods starting from 2026.
Clearer De Minimis Threshold
One of the most notable changes to the CBAM regulation is the introduction of a new and clearer de minimis exemption. Previously, exemptions were based on the value of imports, capped at EUR 150. Now, importers of cement, iron and steel, fertilizer and aluminium sectors are exempt from CBAM obligations if their annual quantity of imports is below 50 tonnes. This shift is significant according to the European Commission; it will exempt around 90% of importers from CBAM obligations, while still covering 99% of emissions—welcome relief for small and medium-sized businesses (SMEs). Electricity and hydrogen remain outside the exemption.
Central Role of the Authorised CBAM Declarant
The role of the authorised CBAM Declarant remains a fundamental component of CBAM. Importers of CBAM goods with the status of authorised declarant remain responsible for emissions reporting, certificate management and recordkeeping. Importers whose imports exceed the 50 tonnes annual threshold and customs representatives of non-EU established entities falling within the scope of the regulation must apply for declarant status, providing evidence of tax compliance, financial capacity and organisational readiness.The amended regulation allows CBAM declarants to formally delegate to third parties their obligation to submit CBAM declarations, but ultimate responsibility remains firmly on the declarant.
Simplification of Emissions Calculation
The amended regulation reduces the operational complexity of CBAM. CBAM declarants are free to choose to report actual emissions verified by accredited bodies or they can rely on default values provided by the European Commission. There is no external verification requirement where default values are chosen.The regulation acknowledges carbon pricing policy in third countries, recognising efforts made outside the EU and integrating them into CBAM calculations.
Timing and Management of Certificates
The amended regulation extends the deadline for submitting annual CBAM declarations and surrendering CBAM certificates from 31 May to 31 August each year, with the first deadline set at 31 August 2027.The sale of CBAM certificates, originally scheduled for 1 January 2026, has been postponed to 1 February 2027. During 2026, companies will report emissions without surrendering certificates, with prices determined quarterly and payments deferred to 2027. As from the first quarter of 2027, at least 50% of CBAM certificates in the declarant’s account in the CBAM registry must be available at the end of each quarter, reducing the burden compared to the previously required 80% threshold.
Reporting deadlines are also redefined to ensure adequate time for data collection, emission verification and certificate acquisition:
- 30 September 2027: deadline for the first annual CBAM declaration for reference year 2026 (instead of 31 May);
- 31 October: Application for certificate repurchase (instead of 30 June);
- 1 November: cancellation of certificates (instead of 1 July 1).
More Proportionate Penalty Regime
The penalty regime has been reshaped to be more proportionate. Instead of a one-size-fits-all approach, penalties will now reflect the seriousness of noncompliance, the intent behind it and cooperation shown by the declarant. The aim is to enforce compliance without penalising minor or unintentional infractions.
BDO Perspective
For businesses, the message is clear. The EU is committed to expanding CBAM to additional sectors and downstream goods as from 2026, so companies should begin preparing now. That means reviewing supply chains, mapping import flows and deciding whether to use actual emissions data or default values. It also means ensuring that internal processes and declarant applications are in place well ahead of the new deadlines.The simplified CBAM regulation represents a turning point. It is friendlier to SMEs, more predictable for larger importers and still robust in its environmental coverage. Companies that act early will not only avoid disruption but may also find themselves at a competitive advantage, demonstrating compliance and sustainability in a global marketplace that increasingly values both.
Guido Calderaro
Paola Levato
BDO in Italy