CBAM and CSRD Updates: UK Business Action Required for 2025–2027

CBAM and CSRD Updates: UK Business Action Required for 2025–2027

Latest Updates: CBAM and CSRD – Navigating the Shifting Landscape

Continuing our exploration of the Carbon Border Adjustment Mechanism (CBAM) (click here to read the background article), here are some essential updates that UK businesses should act on swiftly. The EU's steadfast commitment to sustainability drives global change, influencing trade dynamics and creating challenges and opportunities.

Last month’s updates span two significant areas critical to businesses:

1. The Corporate Sustainability Reporting Directive (CSRD): Simplified reporting requirements.
2. The Carbon Border Adjustment Mechanism (CBAM): Compliance adjustments for importers.

This blog will discuss the key CBAM and CSRD updates and their impact on the UK business landscape.

CSRD Simplification: EFRAG Leading the Charge

The European Commission has tasked the European Financial Reporting Advisory Group (EFRAG) with revising the European Sustainability Reporting Standards (ESRS) to simplify the sustainability reporting process.

By reducing administrative burdens, businesses can focus on delivering actionable and transparent data without compromising on environmental objectives.

Key Updates:

1. Streamlining Mandatory Data Points:
• EFRAG aims to reduce the required data volume, removing less critical elements to simplify compliance.
• This ensures businesses can prioritise key metrics that offer meaningful insights into sustainability performance.
2. Quantifiable Metrics:
• A clear shift toward measurable data reduces the reliance on lengthy narratives, providing stakeholders with reliable, easy-to-compare information.
3. Alignment with Global Standards:
• EFRAG plans to harmonise ESRS with internationally recognised frameworks such as the Global Reporting Initiative (GRI) and Task Force on Climate-Related Financial Disclosures (TCFD).
• This minimises duplication for global businesses and enhances the credibility of sustainability reports.

Why This Matters for Businesses?

The updated standards aim to balance ambition with practicality, offering more precise guidance, streamlined materiality assessments, and improved alignment with other EU regulations, such as CBAM and the Taxonomy Regulation.

What Are The Timelines?

Revised ESRS standards are set for implementation in the 2027 financial year, with early adoption possible in 2026. Businesses should take this opportunity to prepare and adapt.

Leadership Insights:

• Commissioner Maria Luis Albuquerque: "Our goal is to alleviate unnecessary administrative burdens while meeting the core policy objectives of the European Green Deal."
• EFRAG Chair Patrick de Cambourg: "Simplified standards will support businesses in delivering meaningful sustainability information."

CBAM Updates: Greater Flexibility for Compliance

The CBAM reforms aim to streamline the process for importers, offering clarity and easing the financial strain of compliance. These updates provide businesses with the tools and flexibility needed to adapt.

The Omnibus Package: Simplifications for Smaller Importers

The Omnibus Package, introduced on February 26, 2025, simplifies CBAM compliance by introducing a de minimis threshold exemption:

• Who Benefits? Importers of goods weighing less than 50 tonnes annually are exempt.
• Impact: Approximately 90% of importers benefit from reduced administrative load, while 99% of emissions remain covered under CBAM regulations.

Why This Matters?

Smaller importers face fewer regulatory hurdles, allowing them to focus on growth while maintaining accountability for environmental impact.

What Do These Changes mean for Your Business?

CSRD and CBAM reforms present significant business opportunities to streamline processes and achieve compliance more efficiently. Here is how you can adapt:

For CSRD Compliance:

• Stay updated on EFRAG revisions to ESRS standards.
• Evaluate current sustainability reporting practices and identify areas for streamlining.

For CBAM Compliance:

• Act Now: Apply for authorised declarant status starting March 31, 2025, if importing CBAM-regulated goods.
• Register with your National Competent Authority (NCA) to access the CBAM Transitional Registry.
• Map your supply chains and collect emissions data in collaboration with suppliers.
• Use available resources like reporting templates, manuals, and video tutorials on the CBAM registry platform.

Conclusion: Embrace Change, Seize Opportunity

The EU’s sustainability journey is reshaping global trade, bringing fresh complexity for unprepared businesses. By proactively addressing CBAM and CSRD updates, your business can ensure compliance, mitigate risks, and unlock new opportunities in a greener global economy. This is about creating a resilient, future-proof enterprise, beyond just ticking boxes.

Act Today: Pro Enviro is here to help. Contact us for expert guidance and turn sustainability challenges into competitive advantages.

Important Dates to Note

To ensure your business stays ahead of compliance requirements, take note of these key dates related to CBAM and CSRD  (Corporate Sustainability Reporting Directive) updates:

These dates emphasise the significance of proactive preparation for CBAM and CSRD compliance.

Industry Update:

In a significant move towards international climate alignment, the EU and UK have agreed to begin formal discussions on linking their carbon markets. This development could pave the way for greater carbon pricing and reporting consistency, which is particularly relevant for manufacturers navigating CBAM and CSRD requirements across borders. If successful, it may ease compliance burdens for exporters and promote a more unified approach to decarbonisation.