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EU Parliament backs exempting 90% of companies from carbon border levy
Published by Global Banking & Finance Review®
Posted on May 22, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 22, 2025
2 min readLast updated: January 23, 2026
The EU Parliament exempts 90% of companies from the carbon border tariff, targeting major emitters. Permit sales start in 2027.
By Kate Abnett
BRUSSELS (Reuters) -The European Parliament backed changes on Thursday to the European Union's carbon border tariff that would exempt from the scheme companies that import less than 50 metric tons per year of relevant goods.
The proposed changes exclude more than 90% of importers from what will be the world's first carbon border tariff, or Carbon Border Adjustment Mechanism, sparing them time-consuming bureaucracy, the European Commission has said.
It said, however, the scheme would not lose its impact as the remaining 10% of importers are responsible for more than 99% of the emissions associated with imports covered by the carbon border tariff.
The Commission proposed the changes in February to replace the existing rules, under which all individuals or companies importing CBAM-covered goods with a value above 150 euros ($170) would have had to pay the levy from next year.
Companies will have to buy permits to cover the carbon emissions of importing products including steel, cement, aluminium and fertilisers, starting from the year 2026. The changes also include deferring until 2027 the launch date for sales of those permits.
Following Thursday's European Parliament vote, EU countries are due to approve their position on the changes next week, before negotiating the final rules with EU lawmakers. Countries are expected to also back the proposal to exempt 90% of companies, EU diplomats told Reuters.
The carbon border tariff is designed to shield European producers against cheaper rivals in countries with less ambitious climate laws, and prevent them shifting investments abroad to countries including the U.S., where President Donald Trump's administration is aggressively rolling back regulation.
The levy will impose a fee on imported goods that is equivalent to the one paid by EU-based companies that under the EU carbon market already pay for each ton of CO2 they emit.
($1 = 0.8855 euros)
(Reporting by Kate Abnett; editing by Barbara Lewis)
The proposed changes will exempt more than 90% of importers from the carbon border tariff.
The carbon border tariff is designed to protect European producers from cheaper competition in countries with less stringent climate regulations.
Companies will have to start buying permits to cover carbon emissions for importing certain products beginning in 2026.
The remaining 10% of importers are responsible for more than 99% of the emissions associated with imports covered by the carbon border tariff.
Following the vote, EU countries are expected to approve their position on the changes next week before negotiating the final rules with EU lawmakers.
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