ARTICLE
20 March 2025

EU Commission Proposes CBAM Simplifications

Ki
KPMG in Cyprus

Contributor

KPMG has been operating in Cyprus since 1948 and currently employs more than 800 professionals working from 6 offices across the island. It is a member of KPMG International Limited, a global organisation of independent professional services firms providing Audit, Tax and Advisory services. KPMG operates in 143 countries and territories and has approximately 273,000 people working in member firms around the world. Clients look to KPMG for a consistent standard of service based on high-order professional capabilities, industry insight, local knowledge and expertise.
On 26 February 2025, the EU Commission has adopted the 'Omnibus' package of proposals aiming to boost competitiveness of EU companies while continuing to follow the climate and sustainability goals. One of the proposals introduces amendments to CBAM rules ensuring effective prevention of carbon leakage and simultaneously reducing the companies' administrative burdens.
Cyprus Corporate/Commercial Law

On 26 February 2025, the EU Commission has adopted the 'Omnibus' package of proposals aiming to boost competitiveness of EU companies while continuing to follow the climate and sustainability goals. One of the proposals introduces amendments to CBAM rules ensuring effective prevention of carbon leakage and simultaneously reducing the companies' administrative burdens.

Key CBAM changes

  1. Small importers (mostly SMEs and individuals) will be exempt from CBAM obligations by introducing a new cumulative annual threshold of 50 tons per importer. This will eliminate CBAM obligations for approximately 90% of all importers, while still covering over 99% of CO2 emissions in scope.
  2. The rules for companies obliged to report under CBAM will be simplified, in particular, in respect of authorization process for CBAM declarants and the calculation and reporting of embedded emissions.
  3. Anti-abuse and anti-circumvention provisions will be developed in cooperation with local authorities.

These simplifications aim to enhance the efficiency of CBAM in anticipation of its extension to other ETS sectors, downstream goods, and indirect emissions, which are expected to be proposed in early 2026.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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