EU considers exemption of 80% of companies from CBAM levy

The European Commission may consider exempting 80% of companies that will be covered by the CBAM from the border carbon tax. This was stated by European Commissioner for Climate Action Wopke Hoekstra, Reuters reports.

According to him, the EC’s analysis showed that almost all emissions covered by CBAM (97%) are produced by only 20% of companies that fall under the mechanism.

“So would it then not be smart to leave that roughly 80% off the hook, in terms of the administrative work burden?” he said at the European Parliament meeting.

Hoekstra noted that this does not diminish the importance of climate goals, but is a way to make life much easier for a wide range of companies on the continent.

In an interview with the Financial Times, the European Commissioner said that he wants to limit the CBAM to the largest importers and exempt most businesses from the costs of complying with the mechanism and fees as part of the bloc’s efforts to cut red tape and increase productivity.

The proposal could exempt up to 180,000 of the 200,000 businesses subject to CBAM requirements. Starting in 2026, the EU will start levying a carbon border duty under the CBAM on imports of steel, aluminum, cement and other products.

As GMK Center reported earlier, the European People’s Party (EPP), the largest political group in the EU, has proposed a change in the bloc’s approach to climate and economic policy. EPP leaders, in particular, emphasized that climate policy should not hinder the competitiveness of the European economy. In this context, they propose to revise the CBAM, which is due to start operating in 2026, and allocate more funds from the emissions trading system (ETS) to support green technologies.

Also, the European Steel Association (EUROFER) insists on improving and immediately launching the cross-border carbon adjustment mechanism.