30/05/25

EU: Simplification of carbon dioxide emissions taxation at the border is progressing with the approval of the European Council

As published on: metallurgprom.org, Friday 30 May, 2025.

The proposal to reform the EU carbon border adjustment mechanism removed another barrier after the European Council supported simplification of this climate policy may 27.

"Simplification and reduction of the administrative burden for our companies in order to increase the competitiveness of the EU will remain one of the priorities of the Polish presidency," Adam Szłapka, Poland's Minister for EU Affairs, said in a statement.

"Today's agreement sends a clear signal that the Council intends to move forward on this path as quickly as possible."

The European Commission has been under pressure from various spheres to set up CBAM so as to enhance the competitiveness of the block industry, by freeing up small importers and reducing the administrative burden for many companies.

According to the changes, importers will be able to purchase CBAM certificates in February 2027, rather than from January. 1, 2026, to cover the emissions embedded in their imports for 2026, giving businesses more time to adapt to the new carbon pricing mechanism.

The proposal also includes a 50 MT minimum threshold that would exempt 90% of importers while at the same time covering 99% of CO2 emissions from major industrial imports.

"After today's adoption of the Council's position, the presidency will begin negotiations with the European Parliament on this file," the European Council statement added.

This comes almost a week after the European Parliament overwhelmingly ordered the EU CBAM.

CBAMS essentially impose duties on carbon-intensive goods imported by EU countries, including aluminum, cement, electricity, fertilizers, hydrogen, iron, and steel. The goal is to create a level playing field for EU companies, since in most exporting countries the carbon price is not as high as in the EU emissions trading system, or there is no price for emissions at all.

Carbon prices vary greatly geographically. On May 23, the Platts agency, part of S&P Global Commodity Insights, estimated EU quotas for December 2025 at 71.71 euros per ton of CO2e (81.38 US dollars per ton of CO2e). This compares with China's emissions quotas, which were estimated at 69.41 yuan per tonne of CO2e ($9.65 per tonne of CO2e) as of May 23, according to data from the Shanghai Environment and Energy Exchange.

CBAM is currently operating in the EU in a "transition phase" in which importers are required to report emissions related to the relevant products they bring into the EU.

However, from January 1, 2026, as part of the "final stage", importers will be required to purchase certificates.

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EU Carbon border tax CO2 Tax