The European Union is simplifying its Carbon Border Adjustment Mechanism (CBAM), aiming to exempt more than 80% of EU companies starting next year.

EU climate commissioner Wopke Hoekstra noted that 97% of emissions are produced by just 20% of companies under the scheme, so focusing on them will reduce the burden on the rest.

CBAM will tax imports like steel, aluminum, and cement based on their carbon emissions, with full implementation beginning in 2026. The move aims to ease regulatory pressures on businesses, but critics, especially from developing countries, argue it unfairly impacts them.

In addition, some European industries face challenges in gathering the necessary data for compliance. Regarding the issue, Brussels is drafting proposals to simplify sustainable development policies.