EU's Carbon Border Levy: Major Exemptions Proposed for Small Importers

The European Commission is set to propose major exemptions to the EU's carbon border levy for most companies, as they account for just 1% of the emissions within the scheme. The draft proposal suggests a mass-based threshold of 50 tonnes per year, exempting numerous small importers from regulatory obligations.

The European Commission is gearing up to propose significant exemptions to the EU's carbon border levy, aiming to relieve 'the vast majority' of companies involved. This move is targeted at reducing bureaucratic hurdles for businesses, as most exempted firms account for a mere 1% of emissions covered by the scheme.

A draft proposal reviewed by Reuters outlines a change to the carbon border levy system, suggesting it should apply only to companies importing goods over a threshold of 50 tonnes annually. The intention is to align the levy with climate goals without burdening businesses unnecessarily.

Set for formal proposal this week, the reconfigured levy will affect policies set to roll out in 2026, including new charges on imports like steel and aluminum based on CO2 emissions. However, the draft could undergo modifications before its official release and subsequent approval by the European Parliament and EU member states.

(With inputs from agencies.)