On June 19, the European Council and the European Parliament reached a provisional agreement for the amendment of the carbon border adjustment mechanism (CBAM) to exempt small importers, reduce regulatory burdens, and enhance the competitiveness of EU industries.

The amendment simplifies the import process covered by CBAM, such as the authorization process, emission calculation and verification rules, and the financial responsibilities of authorized declarants, while strengthening anti-abuse provisions.

The implementation time of CBAM was extended by one year, giving companies more time to adapt to this new carbon pricing mechanism. Importers will be able to purchase CBAM certificates from February 2027 to cover the carbon emissions contained in their imported goods in 2026, instead of the original January 1, 2026.

In addition, the amendment also introduced a new minimum weight threshold, and each importer will not be subject to CBAM if the import volume does not exceed 50 tons per year. This can exempt 90% of importers, but still cover 99% of carbon emissions from major industrial imports.

Currently, CBAM is in a transitional phase, and importers are required to declare the carbon emissions contained in their goods, but from January 1, 2026, importers will be required to purchase CBAM certificates and pay for the carbon emissions contained in their goods.

The agreement is still subject to approval by the European Parliament and the European Council and is expected to be formally adopted in September 2025.