Published by Global Banking & Finance Review®
Posted on May 27, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleEU countries agree to limit the carbon border tariff to 10% of firms, focusing on major emitters. This change aims to reduce bureaucracy for smaller businesses.
By Kate Abnett
BRUSSELS (Reuters) -European Union countries backed plans on Tuesday to scale back the bloc's carbon border levy to cover just 10% of the companies currently covered by the scheme, on the grounds that these firms account for nearly all of the emissions involved.
Their approval makes it highly likely that the EU will exempt most of the 200,000 importers that had been due to face the world's first carbon border tariff, starting next year.
EU countries must negotiate the final changes with the European Parliament, which said last week it would support the proposals. Ministers from EU countries on Tuesday approved the proposed changes at a meeting in Brussels.
The EU's carbon border tariff is designed to shield European producers against cheaper rivals in countries with less ambitious climate laws. It will impose a fee on imported goods that is equivalent to the carbon price already paid by EU-based companies under the bloc's CO2 emissions policies.
The Commission had proposed the changes in February. It said they would spare smaller businesses from time-consuming bureaucracy without compromising the environmental impact of the policy, as the remaining 10% of importers are responsible for more than 99% of the emissions it covers.
Under the changes, the carbon border tariff will apply costs to companies that import more than 50 metric tons per year of goods including steel, cement, aluminium and fertilisers.
That would replace the existing rules, under which all individuals or companies importing such goods with a value above 150 euros ($170) would have had to pay the levy from next year.
Companies will have to buy permits, starting in 2027, to cover the carbon emissions of importing products from the year 2026.
(Reporting by Kate Abnett, Charlotte Van Campenhout; Editing by Benoit Van Overstraeten and Barbara Lewis)
The EU plans to scale back the carbon border levy to cover just 10% of the companies currently included in the scheme.
The carbon border tariff is designed to protect European producers from cheaper competition in countries with less stringent climate laws.
Companies will need to start buying permits in 2027 to cover the carbon emissions of imported products from the year 2026.
The proposed changes would exempt most of the 200,000 importers from the tariff, applying it only to those importing more than 50 metric tons per year of specific goods.
Under the existing rules, all individuals or companies importing goods valued above 150 euros would have had to pay the levy starting next year.
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