The Previous CBAM Thresholds
Under the EU’s old CBAM requirements, companies were required to submit reports if their annual imports of CBAM-regulated goods exceed €150. Thomas Gerassimos from DG TAXUD reported during a French government webinar that about 500,000 companies registered on the CBAM platform in the Transitional Phase, yet EU Commission data shows only less than 250,000 have submitted reports. This gap underscored the threshold’s ambiguity, causing confusion about reporting obligations with many companies in doubt of whether being in the scope of the legislation or not.
Furthermore, the low threshold burdened small to medium-sised enterprises (SMEs) with complex compliance and data acquisition challenges, particularly when dealing with minor imported quantities, such as a few screws. Interestingly, evidence showed that fewer than 20% of companies are cause of over 95% of CBAM-covered emissions (Tamma et al., 2025), suggesting the potential for focusing CBAM obligations mainly on larger importers. Such a strategy could have spared most businesses the costs of compliance, making life much easier for a wide range of companies across the continent, while not diminishing the importance of the climate objectives (Tamma et al., 2025).
Meanwhile, European industries are facing challenges in maintaining affordability and competitiveness, prompting calls from member states and businesses for streamlined regulations. That is why there has been growing advocacy to increase the “de minimis” threshold from €150, aiming to alleviate the administrative load on companies (BusinessEurope, 2025). While this change might just slightly affect environmental goals, it could be considered a pragmatic step to enhance productivity and reduce bureaucratic hurdles (S&P, 2025). Such an adjustment aligns with the wider European strategy of harmonising industrial resilience with ambitious decarbonisation targets (Tamma et al., 2025).
Challenges for SMEs
European companies had voiced concerns over the complex and costly administrative processes experienced during CBAM’s trial phase. The primary challenge lied in the precise and consistent calculation of CBAM emissions—a difficult task given the lack of widespread EU-style emissions trading schemes or carbon content calculations in many countries, and the process has proven onerous (Tamma et al., 2025). In fact, since many suppliers outside the EU do not face a carbon price, they rarely practice carbon accounting, leaving EU importers responsible for ensuring suppliers understand and adhere to CBAM’s stringent reporting standards to avoid getting fined. Fines for non-compliance under CBAM translate for steel into a price increase from 11% to 56%, for Aluminium from 18% to 92%, for fertilisers from 20% to 103%, and for Cement from 8% to 38%, considering the average prices of these products in 2024.
Since October 2024, companies have been required to declare at least 80% of the real value of emissions, escalating in January 2025 to a mandate that they report emissions strictly according to the EU method, ensuring a rigorous adherence to environmental accountability. For detailed guidance on emissions calculation, refer to our dedicated blog, here, or feel free to contact us for further information and support. These developments have intensified demands from businesses for greater certainty and reduced bureaucracy, challenges to be addressed by the European Commission (S&P, 2025).
While larger corporations can integrate CBAM requirements into their existing environmental and regulatory frameworks—often supported by budgets for overall environmental compliance—SMEs face significant hurdles. These smaller enterprises typically lack the resources and technical knowledge necessary for navigating such a complex regulatory landscape, making compliance disproportionately demanding and often unsustainable, especially regarding suppliers’ support for emissions calculation.
The New CBAM Thresholds
Addressing implementation challenges, the European Commission raised the CBAM threshold: Companies importing under 50 tonnes of covered goods or 100 tonnes of CO₂ annually are now exempt—up from the €150 de minimis value. This change is set to relieve 90% of importers from CBAM duties while covering 99% of emissions. This regulatory update aims to streamline the EU’s regulatory framework, particularly focusing on simplifying CBAM processes and emissions reporting (S&P, 2025).
This change is part of broader efforts to simplify compliance and focus on importers with higher environmental impacts. Additionally, it aims to enhance the accuracy and relevance of measurements, better reflecting the environmental impact of imports. This adjustment brings EU policies in closer alignment with the UK’s CBAM approach, potentially facilitating re-linkage of the two systems. Discussed by UK Prime Minister Starmer at the European Council and reported by the Financial Times, the UK model activates CBAM for imports valued under £50,000 annually, significantly easing the administrative load for SMEs compared to the EU’s threshold.
The new threshold addresses potential issues by not provding just a carbon content-based measure, but also a quantity-based one at 50 tonnes of covered goods. Critics had pointed out that a carbon content threshold might not have reduce the complexity for smaller shipments, as verifying emissions could demand resources comparable to full CBAM reporting. This change simplifies the determination of scope for companies, avoiding these complexities (BusinessEurope, 2025).
The other provisions of the Omnibus
The EU Commission has introduced other various amendments through the Omnibus Package aimed at simplifying compliance and bolstering the system’s effectiveness for the long haul. These revisions streamline the authorisation of CBAM declarants and refine obligations such as the calculation of embedded emissions and reporting requirements, thereby reducing the administrative burden on companies. Furthermore, the package fortifies the mechanism against circumvention and toughens penalties for non-compliance, particularly targeting deliberate evasion tactics like import splitting, to preserve CBAM integrity as it prepares for an expansion to cover additional ETS sectors and downstream goods by early 2026.
Additional measures include the reduction of quarterly certificate holding requirements delays the obligation to purchase CBAM certificates until 2027. The deferral of CBAM certificate purchases until 2027 grants importers a temporary reprieve from quarterly financial obligations, providing an opportunity to better plan and manage their financial resources in the short term. However, this delay does not eliminate the financial responsibilities for emissions incurred in 2026. Importers must remain vigilant, as the strategy of deferring purchases might offer immediate cash flow benefits but does not mitigate the ultimate financial impact, which is tied to the environmental costs of the previous year’s imports.
International Reactions
Developing countries criticise the Omnibus Package and mainly the CBAM threshold adjustments, arguing they are unfair. These adjustments exempt most European SMEs because their emissions are relatively minor, yet they impose stringent emission calculation requirements on suppliers from developing countries, even if they export only small quantities to the EU. This discrepancy arises because the threshold adjustments focus on reducing administrative burdens for EU SMEs without equally considering the compliance challenges faced by non-EU suppliers. They assert that the EU is inadvertently favoring its industries while placing disproportionate compliance burdens on enterprises in developing countries.
Compatibility of the CBAM with the World Trade Organization’s (WTO) General Agreement on Tariffs and Trade (GATT) hinges on its primary aim to prevent carbon leakage. By relaxing the CBAM threshold, however, the focus shifts subtly from stringent environmental effectiveness to ease of compliance. This adjustment raises concerns about diluting the environmental rigor of the mechanism. The challenge lies in ensuring that these changes do not result in lower environmental effectiveness and unfair competitive advantages, thus maintaining adherence to WTO rules that prohibit arbitrary or unjustifiable discrimination between countries under similar circumstances. However, if 99% of emissions remain captured from the previous CBAM Scope, it’s environmental effectiveness is confirmed.