EU Ministers Back Simpler Carbon Border Rules to Boost Business and Climate Goals

The EU is streamlining its green policy toolbox. During its last meeting, the General Affairs Council agreed on its negotiating position for a revamped Carbon Border Adjustment Mechanism (CBAM)—a flagship climate measure aimed at preventing carbon leakage by placing a carbon price on imports of certain goods. The proposal is part of the European Commission’s wider ‘Omnibus I’ legislative package, designed to reduce regulatory burdens and enhance EU competitiveness.

The updated CBAM regulation seeks to make life easier for importers—especially small and medium-sized enterprises (SMEs)—by simplifying compliance procedures and lowering administrative costs. Crucially, the new rules maintain environmental integrity, with 99% of emissions from imported CBAM goods still covered under the updated system.

One of the key changes is the introduction of a broader de minimis exemption, setting a 50-tonne annual threshold below which importers will be exempt from CBAM obligations. This replaces the current narrower exemption for goods of negligible value, and is expected to shield SMEs and low-volume importers from complex reporting requirements.

Additional changes include streamlined authorisation processes, simplified data collection, clearer rules on calculating embedded emissions, and more practical procedures for claiming recognition of carbon prices paid in third countries. These updates aim to reduce friction for legitimate importers while keeping the system robust against evasion.

“Simplification and reducing the administrative burden for our companies to boost EU competitiveness remain among the Polish presidency’s top priorities,” said Adam Szłapka, Poland’s Minister for the European Union. “Today’s agreement sends a clear signal that the Council is determined to advance on this path as fast as possible.”

This legislative push comes in response to high-level calls from EU leaders for smarter regulation. Reports by Enrico Letta and Mario Draghi, alongside the Budapest Declaration of November 2024, have all urged the EU to launch a “simplification revolution” to help businesses thrive without compromising on core values like sustainability.

With the Council’s position now adopted, interinstitutional negotiations with the European Parliament will begin shortly. If successfully concluded, the updated CBAM rules could become a model for marrying climate ambition with economic pragmatism—right when the EU needs it most.