On 22 May 2025, the European Parliament voted overwhelmingly in favour of the European Commission’s Omnibus legislative package, a broad initiative designed to streamline sustainability reporting obligations under several frameworks, including the Carbon Border Adjustment Mechanism (CBAM). With 564 votes in favour, 20 against, and 12 abstentions, this decisive result signals robust political support for simplifying the EU’s climate and trade regulations.

The changes introduced—focused on a mass-based threshold, extended deadlines, and more flexible certificate management—are not yet law, but are expected to be confirmed following upcoming trilogue negotiations between the Parliament, Commission, and Council. Given the scale of support, consensus is likely to be reached efficiently, with final legislation expected before the end of June 2025.

These reforms represent a major step forward in aligning the CBAM’s definitive phase with the operational realities of international trade. For importers, industrial players, and environmental market specialists, the proposed updates offer regulatory clarity, administrative relief, and a clear call to prepare compliance frameworks in anticipation of formal adoption.

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Context: CBAM’s Defining Moment & Proposed Modifications

CBAM, a flagship element of the European Green Deal, is designed to prevent carbon leakage by pricing the embedded emissions in certain carbon-intensive imports. This ensures a level playing field between EU producers subject to the EU Emissions Trading System (ETS) and foreign competitors.

While the transitional phase of CBAM (2023–2025) has only required quarterly emissions reporting, the definitive phase beginning in 2026 will involve financial compliance through the purchase and surrender of CBAM certificates.

The Omnibus update, now endorsed by Parliament, aims to streamline compliance while maintaining CBAM’s environmental integrity, reducing burdens on smaller market actors, and improving predictability across the system.

This article summarises the proposed key changes from the original legislative text that the Parliament has now endorsed.

1. Shift to a Mass-Based Threshold
   One of the most significant updates is the proposed replacement of the €150 per-shipment de minimis rule with a 50-tonne per-year mass threshold, calculated per importer and per type of CBAM-covered good.
   This change will maintain coverage of approximately 99 percent of embedded emissions while exempting around 90 percent of current importers, particularly SMEs. By focusing on volume rather than shipment value, the rule better captures emissions relevance and removes artificial exemptions based on pricing alone.
   For large importers, this change clarifies compliance boundaries. For smaller players, it effectively removes the requirement to manage CBAM certificates, lowering entry barriers to international trade and ensuring proportional regulation.
2. Institutional Monitoring and Enforcement
   The European Commission will be tasked with overseeing the implementation and impact of the mass-based threshold. This includes ensuring that the threshold continues to capture the expected share of embedded emissions and establishing enforcement mechanisms for detecting threshold circumvention.
   Importers are encouraged to implement robust emissions tracking and customs declaration systems to avoid unintended violations or delayed registrations. Enhanced monitoring tools and collaboration with customs authorities are expected to support this process.
3. Mandatory Registration in the CBAM Registry
   Under the proposed rules, importers must register in the CBAM registry by the end of the quarter in which they expect to exceed the 50-tonne threshold for any CBAM-covered product.
   This registration obligation ensures early engagement with the compliance process and allows regulators to maintain an up-to-date overview of participants. Companies near the threshold will need to closely monitor volumes and establish internal alerts to avoid unregistered compliance breaches.
4. Extended Deadlines for Compliance Actions
   To address the logistical demands of emissions tracking and certificate management, the proposed Omnibus changes introduce the following extended deadlines:
   • CBAM Declaration and Certificate Surrender: Extended from 31 May to 31 August, allowing companies more time to compile and verify annual data.
   • Excess Certificate Repurchase Request: Moved from 30 June to 30 November, providing an extended reconciliation window.
   • Certificate Cancellation: Certificates purchased in the calendar year before the last will be cancelled on 1 October, without compensation, if they remain unused. This reduces market distortions and discourages speculative procurement.
5. Certificate Procurement and Management Flexibility
   The proposed update also improves flexibility in how CBAM certificates are managed:
   • Quarterly Procurement Obligation: Reduced from 80 percent to 50 percent of estimated embedded emissions. This prevents over-purchasing and limits financial exposure to estimation errors.
   • Excess Certificate Repurchase Cap: Businesses will now be allowed to return up to 50% of their total annual CBAM liability, instead of one-third of total certificates purchased.
   These adjustments reflect a realistic approach to emissions forecasting and seasonal import variations, offering businesses more control over how they manage their CBAM portfolios.
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   Timeline at a Glance:
   The implementation timeline for CBAM’s definitive phase, assuming the Omnibus proposals are confirmed, would unfold as follows:
   • 2026: First year of CBAM obligations. Importers begin tracking emissions and preparing procurement strategies.
   • February 2027: CBAM certificates become available for purchase.
   • Throughout 2027: Quarterly procurement begins, covering 50 percent of estimated emissions.
   • 31 August 2027: Deadline for submitting the 2026 annual CBAM declaration and surrendering certificates.
   • 30 November 2027: Final date to submit a repurchase request for excess 2026 certificates (up to 50 percent of liability).
   • 1 October 2028: Unused 2026 certificates are cancelled if still held.
   This cadence provides a clear roadmap for compliance and underscores the need for forward-looking internal controls and emissions forecasting capabilities.  
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6. Carbon Costs Along the Supply Chain
   Another important shift in the proposed update involves recognition of carbon costs already paid in third countries. The Omnibus package proposes that importers may now:
   • Deduct carbon costs paid anywhere along the supply chain, not just in the country of origin.
   • Use default carbon price values per country (to be published by the European Commission) if exact costs cannot be verified.
   This change enhances fairness in global trade, and rewards cleaner production practices regardless of geography. This highlights how supplier data collection and due diligence will be essential for maximizing allowable deductions.

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Conclusion and Strategic Considerations for Businesses

The CBAM Omnibus package, as endorsed by the European Parliament, promises a more accessible and streamlined approach to carbon border compliance. With its focus on proportionality, administrative efficiency, and realistic timelines, the proposed legislation addresses many of the concerns raised during the transitional period.

However, it is important to note that these changes remain proposals, pending agreement through trilogue negotiations. Given the strong vote in Parliament, approval is expected imminently, but companies should be prepared to adjust based on final legislative wording.

In anticipation of formal adoption, environmental compliance teams should begin aligning their operations with the proposed structure, ensuring they are positioned to respond confidently and competitively once the definitive CBAM phase come into force.

These updates create a more balanced compliance environment but also raise the bar for internal preparedness. Businesses will need to:

• Upgrade emissions data infrastructure to meet quarterly and annual reporting requirements.
• Engage suppliers to gather accurate emissions and carbon pricing information.
• Develop internal procurement strategies for CBAM certificates that reflect seasonal variations, trade cycles, and potential overestimation risks.
• Establish rigorous internal controls to avoid compliance gaps during transitional periods.

Companies that act early will benefit from smoother integration, reduced penalties, and cost-optimised participation in the EU carbon pricing regime.

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AFS Energy’s Perspective: Supporting Industry Through a Defining Transition

While many practical aspects of the definitive CBAM phase still require clarification, and the EU continues its open dialogue on several outstanding topics, at AFS Energy we view the Omnibus revisions as a positive step toward ensuring that carbon pricing at the border remains both environmentally effective and economically manageable.

Despite potential simplifications, CBAM compliance and CBAM certificate management remains a complex framework to navigate for businesses. Proactive planning, supplier engagement, and high-integrity emissions data systems remain essential prerequisites for successful implementation.

As a trusted intermediary and advisor in the environmental markets, AFS Energy is uniquely positioned to help businesses navigate this new regulatory environment. Our expertise spans CBAM compliance strategy to certificate management solutions.

We collaborate closely with our clients to develop tailored strategies that optimize compliance while effectively managing cost and risk, for example offering direct and seamless access to hedging tools through our EUA trading platform.

From strategic consulting to operational execution, at AFS Energy we help organisations turn compliance into opportunity ensuring that environmental responsibility translates into long-term competitiveness.

For more information or to speak with one of our experts, contact us at www.afsenergy.nl