After the approval of the European Parliament, EU member states have now officially endorsed the easing of the carbon border tax, exempting most companies from the levy.
The Carbon Border Adjustment Mechanism (CBAM) aims to create a level playing field between European businesses and competitors from regions with less stringent emission standards. The tax system will become fully operational in 2026.
The relaxation of CBAM rules is part of the European Commission’s effort to reduce administrative burdens on businesses. The Commission argued that even with the exemptions, 99% of the total emissions from imported iron, steel, aluminium, and cement would remain covered.
Under the new rules, the tax will apply only to companies importing more than 50 tonnes of high-carbon-emission products annually. This threshold, agreed upon in June by EU member states and the European Parliament, will see 90% of importers exempted from the levy.
In Belgium, for instance, only about 800 of the largest importers will remain subject to the tax, compared to the initially estimated 7,400 businesses, according to a report by De Tijd earlier this month.
The European Parliament approved the measure with a large majority on 10 September. Member states followed suit on Monday.
The legislation will be published in the EU’s Official Journal in the coming days and will come into force three days after publication.
