The European Commission has proposed significant amendments to the implementation of the Carbon Border Adjustment Mechanism (CBAM) to reduce administrative burdens on companies and enable a more efficient application of the mechanism. These amendments include exemption thresholds for smaller importers, postponement of financial obligations, simplification of reporting procedures, and additional guidelines for emissions calculation.
1. Introduction of a mass threshold for exemption – Focus on major emitters
One of the key changes is the introduction of a 50-ton annual threshold for CBAM-covered goods imported from third countries. This threshold means that smaller importers will be exempt from CBAM obligations, while the mechanism will focus on large industrial importers responsible for the majority of emissions.
Key impacts of this Amendment:
- Reduction in the number of obligated entities: The number of companies required to submit CBAM reports would decrease from 200,000 to approximately 20,000, significantly reducing the administrative burden.
- Coverage of emissions remains nearly unchanged: Although the number of obligated entities would be drastically reduced, the Commission estimates that over 99% of emissions covered by CBAM would still be included under the mechanism.
- Importers below the threshold would not be required to maintain detailed emission records, easing operations, especially for small and medium-sized enterprises.
This amendment is introduced to prevent the negative impact of CBAM on small market participants and ensure more efficient market regulation.
2. Postponement of CBAM certificate purchases – Transition period until 2027
CBAM is currently in a transitional phase lasting until the end of 2025. According to new proposals, the European Commission plans to postpone the obligation to purchase CBAM certificates by one year.
New timeline:
- Currently (until 31.12.2025): Companies are required to submit quarterly reports on embedded emissions in imported goods but are not required to pay CBAM charges.
- 2026: The first year in which CBAM certificates were initially planned to be purchased – but the proposed amendment postpones this obligation.
- From 2027: The obligation to purchase CBAM certificates for emissions from 2026 begins.
Reasons for postponing CBAM certificate purchases:
- Companies are given additional time to adapt to the rules and develop internal emissions monitoring systems.
- Importers will have more time to plan financial obligations.
The transition period allows third countries to better align with CBAM standards and introduce their own carbon pricing mechanisms.
3. Simplification of reporting procedures and administrative obligations
To further facilitate CBAM implementation, the European Commission has proposed reducing administrative requirements and simplifying emissions calculation methods.
Proposed Amendments include:
- Standardized emissions values: Introducing average annual emission values for specific industrial sectors will reduce the need for detailed calculations when importers lack precise data.
- Easier authorization of declarants: Importers will have a simplified registration process with relevant authorities.
- Better integration with existing mechanisms: Connecting CBAM with the EU Emissions Trading System (EU ETS) will help avoid regulatory duplication and facilitate data transfer between systems.
The Commission emphasized that one of the primary goals of these amendments is to reduce compliance costs, particularly for companies operating in multiple EU member states.
4. Determining average carbon prices in third countries
CBAM is designed to equalize competitive conditions between EU companies and importers from third countries. However, many third countries already have their own carbon pricing mechanisms (e.g., China, Canada, South Korea).
How will the carbon price from third countries be applied?
- From 2027, the European Commission will publish annual reference carbon prices in third countries.
If a country already has an emissions trading system, importers will only pay the difference between the EU ETS price and the domestic carbon price in that country, preventing double taxation on emissions and encouraging EU trade partners to develop their own carbon pricing systems.
5. Next steps – Legal adoption and possible additional Amendments
The proposed amendments are not yet final – they must go through the legislative process within the EU. This means that the European Parliament and the Council of the EU must review them before they are adopted.
Possible additional Amendments in the 2026 CBAM review
The European Commission has already announced that during 2026, it will conduct a comprehensive CBAM review, which will include:
- Considering the expansion of CBAM to other industries (currently, it only applies to cement, iron and steel, aluminum, fertilizers, hydrogen, and electricity).
- Potential inclusion of indirect emissions (emissions generated throughout the entire production process, not just in the direct production phase).
- Increasing the rate of gradual reduction of free allocations in the EU ETS to align with CBAM.
Impact of CBAM Amendments on Serbia:
The announced amendments to the CBAM will have significant consequences for the Serbian economy, particularly in the energy, steel, aluminum, and fertilizer sectors, which are directly affected by this mechanism. As a candidate for EU membership, Serbia finds itself in a unique situation, given that it has not yet introduced a national emissions trading system but at the same time exports significant quantities of electricity and other CBAM-covered products to the EU.
The threshold of 50 tons per year may provide some relief for smaller Serbian exporters, but for larger companies in the steel and aluminum sectors, this change will not have a significant impact, as they will still be required to submit reports and purchase CBAM certificates. Additionally, Serbia could benefit from the postponement of the obligation to purchase CBAM certificates until 2027, as this would provide the Republic of Serbia with more time to conduct all necessary analyses to decide on the appropriate solution—whether to introduce a national carbon emissions tax or establish a regional ETS. Considering CBAM regulations, Serbia faces a choice between introducing a national carbon emissions tax or establishing a regional ETS. The regional ETS system has been proposed by the Energy Community Secretariat, and its implementation could enable Serbia to be exempt from CBAM. However, Serbia and other economies in the region have not accepted this proposal due to concerns that it would significantly increase production costs and create uncertainty regarding the allocation of free emission allowances. In this context, Serbia has announced the integration of its electricity market with the EU market through Hungary and Bulgaria by the fourth quarter of 2026. This process, known as market coupling, would allow market synchronization and potentially facilitate electricity trade between Serbia and the EU. However, market coupling in itself does not automatically entail the adoption of the ETS but could serve as an intermediate step toward Serbia’s integration into the European emissions trading system or potential negotiations for CBAM exemptions.