The EU proposes sharper Carbon Border Rules: EC proposes key amendments ahead of the 2026 definitive CBAM phase

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The European Commission (EC) has published a legislative proposal to amend the EU Carbon Border Adjustment Mechanism (CBAM) Regulation. The proposed amendments include simplifications for importers of small quantities and more strict enforcement measures.

The EC main adjustments to fine tune the CBAM for the financial phase

While the EC has reaffirmed its commitment to fully implementing the CBAM, the proposed amendment raises the applicability threshold from the current €150 per shipment to 50 tonnes of net mass per importer per year (threshold not applicable for electricity and hydrogen). This adjustment will continue to cover over 99% of emissions within the CBAM’s scope while excluding small importers. According to the published working papers, importers falling below this threshold must still identify themselves as ‘occasional CBAM importers’ when filing customs declarations and monitor that they do not exceed the threshold over the calendar year.

Regarding the timeline, the definitive phase of CBAM is still expected to begin in January 2026, but CBAM certificates sales may be postponed until February 2027 due to uncertainties related to the IT systems. It is a common misconception that this delay equates to a deferral of financial obligations by a year. In reality, while companies won’t need to purchase CBAM certificates during 2026, they would still need to surrender certificates for goods imported in that year by the deadline of August 31, 2027.

In addition to these adjustments in scope and timeline, the EC aims to significantly strengthen the enforcement regime by introducing much harsher penalties for deliberate non-compliance. Importers may face fines up to five times the value of unsurrendered CBAM certificates for intentional violations, such as artificially splitting imports to bypass the threshold. In such cases, joint liability will apply across the entire supply chain, meaning all entities involved in schemes to artificially divide imports to evade CBAM obligations will be collectively responsible for the penalties.

Some amendments aim to streamline compliance and adjust the scope

The proposal introduces several amendments aimed at streamlining the reporting procedures and simplifying compliance requirements for importers, thereby reducing administrative and financial burdens. Key amendments include:

  • Reduced Quarterly Certificate Holding Requirements: Under the current CBAM Regulation, importers are required to purchase 80% of CBAM certificates at the end of each quarter as advanced payments. The proposal seeks to reduce this requirement to 50% of quarterly emissions, easing the financial pressure on importers.
  • Extended Deadline for CBAM Declarations: The deadline for submitting annual CBAM declarations for the previous calendar year is set to be extended from May to August each year, beginning in 2027. This extension provides importers with additional time to prepare and submit their declarations.
  • CBAM Representative: To enhance flexibility, importers will have the option to delegate the submission of CBAM declarations to a third party with the necessary expertise. However, the authorized CBAM declarant will remain liable for all CBAM obligations.
  • Definition of the “CBAM Importer” : The definition of a “CBAM importer” has been a subject of debate for quite some time. In the proposal, EC closes the existing gap and expands the definition to importers who release CBAM goods for free circulation through the submission of a bill of discharge (‘aanzuiveringsafrekening’), rather than through a customs declaration. 

The scope of the CBAM has been refined to exclude low carbon intensity products and to simplify the process for calculating greenhouse gas emissions:

  • Exemptions for Specific Sub-Products: The list of CBAM-covered goods has been revised to exclude non-calcined kaolinic clays. This exclusion aims to focus the mechanism on products with higher carbon footprints.
  • Simplified Emissions Calculations for Certain Goods: Emissions calculations have been streamlined for goods that primarily contain emissions from precursors, such as steel and aluminum, by excluding 
    • emissions from precursors produced in a country where EU ETS applies,
    • emissions from finishing processes carried out in a separate installations

The EC’s proposed amendments bring various technical changes to the CBAM Regulation. This update highlights the most significant developments affecting most CBAM importers. For more details or assistance, PwC Belgium is available to help.

How can PwC assist you?

Navigating the complexities of the updated CBAM Regulation can be challenging, but PwC Belgium offers comprehensive support to help you manage these changes effectively. Our services include:

  • Impact assessment and strategic guidance : evaluating import volumes for compliance and exemptions, providing financial assessments of CBAM’s impact, and identifying eligible global carbon pricing schemes for rebates. Review your supply chain to incorporate customs procedures to gain duty and CBAM efficiencies, and integrate carbon costs into transfer pricing strategies to ensure tax compliance and boost profitability.
  • Compliance and reporting support : Support your company in complying with CBAM requirements, including preparing and submitting CBAM reports in XML format. Assist you and your suppliers in calculating and verifying the embedded emissions of CBAM goods using the EU’s established methodology.
  • Certificate accounting guidance : Advising on the optimal timing and volume of CBAM certificate purchases and helping to put a compliant and efficient CBAM certificate accounting process in place.
  • CBAM Compliance Tool : built by our PwC experts on the SAP Know Your Value Chain application, the tool is designed to streamline CBAM reporting based on ERP and/or uploaded data, and integrate greenhouse gas calculations according to the EU methodology. For more information or to see our tool in action, please visit our dedicated website to book a demo.

For more information on how these services can help you navigate CBAM, please contact one of our experts.

 

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