CBAM and the Omnibus Initiative – Simplification with Clear Limits

The Omnibus Initiative of the European Commission aims to simplify regulatory requirements while maintaining the effectiveness of key climate protection measures. In addition to the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, the Carbon Border Adjustment Mechanism is also affected by the planned reforms. While businesses will benefit from simplified processes, the challenge remains to effectively prevent carbon leakage.

New de minimis Threshold

A key element of the reform is the introduction of a new de minimis threshold for small CBAM importers. The proposed threshold is set at 50 tonnes per importer. This measure will exempt approximately 90 percent of importers from CBAM obligations while still covering 99 percent of the imported emissions under regulation. The European Commission aims to significantly reduce the administrative burden for small market participants without compromising the effectiveness of CBAM.

Simplified Processes

In addition to the exemption for small importers, further simplifications will be introduced for companies that remain within the CBAM framework. The proposed changes primarily concern the authorization of CBAM declarants, the calculation of emissions, and the management of financial CBAM obligations. These adjustments are designed to make compliance more efficient and less time-consuming for affected businesses.

Protection Against Evasion and Misuse

At the same time, the Commission is planning measures to further strengthen the effectiveness of CBAM. This includes expanding anti-abuse regulations and working closely with national authorities to develop a joint anti-circumvention strategy. These measures aim to ensure that companies do not artificially split shipments to fall below the new threshold and that loopholes are closed at an early stage.

Impact on Businesses

For many companies, the reform represents administrative relief. Smaller importers who are now exempt from CBAM can expect reduced regulatory requirements. Meanwhile, companies still subject to CBAM will benefit from improved processes and simplified emissions calculations, making compliance easier. However, new challenges also arise. Companies must carefully analyze whether they still fall under CBAM and assess how the simplified calculations impact their obligations. Additionally, they should prepare for stricter enforcement of anti-circumvention measures, which could lead to increased compliance monitoring.

I### mpact on Climate Protection and Carbon Leakage The new adjustments aim to make CBAM more efficient without weakening the original purpose of the mechanism. By clearly defining the de minimis threshold, most imported emissions remain regulated while relieving small market participants of excessive administrative burdens. This targeted exemption aligns with the regulation's objectives and ensures that carbon leakage continues to be effectively addressed. Nevertheless, it remains to be seen whether these simplifications will prove effective in the long term. If larger companies find ways to bypass the regulation through circumvention strategies, the effectiveness of CBAM could be undermined despite the new enforcement measures.

Not Yet in Force

The Commission's proposal has not yet come into force. It still needs to go through the European legislative process. A key point of interest will be how the Social Democratic and Green factions in the European Parliament vote on the matter. So far, these groups have been highly critical of the Omnibus Initiative, making their stance on the proposed CBAM reforms particularly significant.

Conclusion and Recommendations

The planned adjustments under the Omnibus Initiative provide businesses with significant relief and are generally a positive development. While smaller importers benefit from the new de minimis threshold, larger companies can adapt their processes to the simplified but still binding CBAM requirements. With these adjustments, only companies and imports that are truly relevant in terms of their climate impact are now subject to CBAM obligations. It is hoped that this will also increase acceptance of climate protection measures among businesses and the public. Ultimately, effective and sustainable climate protection can only succeed with broad support from the private sector.

Support for CBAM and the Omnibus Initiative

If you need assistance in adapting to the new CBAM regulations or analyzing the impact of the Omnibus Initiative on your company, feel free to contact us directly at helge@kolum.earth. We are happy to support you in navigating these changes. Best regards, Helge Wieggrefe