EU Parliament Approves Stricter Carbon Monitoring for Imports

European lawmakers have approved enhanced monitoring measures for heavy industry imports as part of the European Union’s forthcoming carbon border tax. This decision comes just days before the European Commission is expected to reinforce legislation associated with this tax. The European Parliament’s environment committee voted **68-7** in favor of stricter enforcement, aiming to ensure compliance among companies importing goods under the EU27’s Carbon Border Adjustment Mechanism (CBAM).

The carbon border tax targets products such as steel, aluminium, cement, and fertilisers, with its operational phase set to begin in **January 2026**. From this date, companies will be required to account for the emissions generated by their imported products. The EU aims to create a level playing field for its businesses, which must adhere to the bloc’s Emissions Trading System. In addition, the EU hopes to motivate other countries to monitor and price their carbon emissions effectively.

As part of the upcoming measures, the European Commission plans to announce new protocols on **December 10**. These measures will establish a standardized CO2 value based on country or company to prevent importers from circumventing the carbon border tax. A leaked document obtained by Euronews indicates that the Commission intends to mandate physical site visits for each facility producing goods subject to CBAM taxation starting in 2026. By **2027**, these site visits might be replaced with virtual assessments or waived entirely if the installation is deemed low-risk and data integrity is validated.

Companies will be allowed a **5% margin of error** when reporting emissions associated with their products. This threshold is the minimum accepted before the data is considered unreliable. The document also highlights plans to align the carbon border tax with the EU’s domestic carbon market.

In a move to simplify compliance, the European Commission proposed changes to the CBAM law in February, which were adopted in **April 2023**. EU co-legislators agreed in **September** to implement an exemption threshold for companies producing less than **50 tonnes** of CBAM goods annually. Previously, the threshold was based on value, set at **€150** per consignment. This revision is expected to exempt approximately **182,000 importers**, primarily small and medium-sized enterprises (SMEs), while still covering over **99%** of emissions.

For those remaining under the CBAM, the adjustments will streamline reporting requirements, simplify the authorisation process, and ease the calculation of emissions. The Commission anticipates that these changes will reduce regulatory burdens and compliance costs for businesses. Starting in **2027**, the Commission may also provide default carbon prices for third countries with established carbon pricing rules and publish the methodology for their calculation.

Mohammed Chahim, a Member of the European Parliament from the Socialists and Democrats group in the Netherlands, stated that a robust carbon border tax could align with climate mitigation strategies. He emphasized that the new system would replace free allowances for industries shifting production to countries with less stringent climate regulations.

Concerns have emerged from the automotive sector regarding the implementation of the carbon border tax. The European Automobile Manufacturers’ Association (ACEA) has urged the EU to expedite clarifications on the tax, citing uncertainties that might impede its members. Director General Sigrid de Vries underscored the importance of accurate reporting of embedded emissions, stating, “Our members import and process large volumes of steel and aluminium, and their role in the proper functioning of the mechanism is crucial.”

De Vries noted that while automakers are committed to making the CBAM work, there are still many critical unknowns that could hinder proper implementation by the January **2026** deadline. The ongoing discussions and legislative changes will play a significant role in shaping how effectively the EU can manage its carbon emissions and influence global practices.