AEGIS Europe reacts to the European Parliament endorsement of the European Commission proposal for simplifying the CBAM
/Brussels, 23 May 2025. Yesterday, the European Parliament endorsed the European Commission’s proposal to simplify the Carbon Border Adjustment Mechanism (CBAM). The text was adopted with 564 votes in favour, 20 against, and 12 abstentions, reflecting broad political consensus. MEPs introduced only technical amendments for clarification and supported the inclusion of a new de minimis mass threshold of 50 tonnes.
We welcome the remarks made by MEP Antonio Decaro, Chair of the ENVI Committee and rapporteur, following the vote:
“The CBAM is a crucial instrument to help the EU prevent carbon leakage and incentivise climate action outside the EU. (...) This approach enables us to simplify matters for companies without dismantling or weakening the CBAM. We will continue to work quickly to bring legal clarity and certainty to all CBAM stakeholders.”
While we support this progress, we urge legislators to consider some key recommendations to ensure that the CBAM remains both effective and industry-friendly:
AEGIS Europe has been advocating for the adoption of an export adjustment for several years: CBAM needs a WTO-compatible export solution for CBAM sectors to avoid carbon leakage and the replacement of EU low-carbon products with high-carbon alternatives on global markets, in a context where European producers already face several challenges in the export market, including high production costs (especially energy costs), global overcapacities, and aggressive industrial and trade policies by third country competitors.
Furthermore, anti-circumvention rules must be strengthened to ensure the effectiveness of the measure and avoid practices such as resource shuffling which allows the exporting to the EU only products with lower carbon footprint while deviating other products to other markets, or cost absorption, where producers could absorb partially or totally the cost of the CBAM by reducing the price of the products at the EU border and/or by spreading the levy across his entire production. The risk of circumvention must be monitored at customs level, and the authorisation process for CBAM declarants should ensure that they are sufficiently skilled to detect this. Effective enforcement of the new exemption threshold for small importers at 50 tonnes of CBAM goods per year as introduced by the Omnibus package is necessary to prevent circumvention, as economic operators could try and avoid CBAM obligations by artificially importing through multiple entities falling below the threshold. Moreover, while AEGIS sees the benefits of simplifying CBAM for importers, it draws the legislator’s - attention to the need to reciprocally simplify the EU ETS for small emitters on the EU manufacturing side.
AEGIS Europe supports a CBAM that is efficient in addressing carbon leakage risks while ensuring a level playing field on both European and foreign. To achieve these goals, we believe it is imperative to assess CBAM effectiveness before any extension of its scope: this assessment should have as a departing point a consultation of the industry. To do so, it is important to define the assessment criteria which will be used and to conduct a prior thorough impact assessment by consulting the industries concerned. Moreover, for some ETS sectors with very specific value chains, products, and global trade flows, a CBAM cannot effectively address carbon leakage and reduce emissions. For these sectors a stronger carbon leakage protection is needed.
In conclusion, AEGIS Europe members agree on the ultimate importance of finding a balance between simplification, accuracy and effectiveness of the mechanism in preventing carbon leakage. Moreover, simplification should not facilitate or lead to circumvention, and any effort in this sense should be subject to a comprehensive evaluation. A thorough consultation of the industry, including both CBAM sectors and sectors which might be covered by CBAM, should be conducted, keeping in mind that CBAM alone cannot solve the carbon leakage issue for all sectors, and further measures are needed to achieve decarbonisation.
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AEGIS Europe is an industry alliance that brings together more than 25 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.