VDMA calls for CBAM reform to ease burden on machinery sector

Frankfurt, Germany – German mechanical engineering association VDMA has called for changes to the EU's carbon border adjustment mechanism (CBAM), warning that its reporting requirements are placing a disproportionate burden on machinery and plant engineering companies.

In a 28 Oct statement, the association said CBAM was significantly affecting companies in the sector and needed to be simplified, particularly if its scope is extended to more complex, processed products.

Citing a study by the European roundtable on climate change and sustainable transition, VDMA said adjusted thresholds could significantly reduce the administrative burden while largely preserving the mechanism's climate protection impact.

"The study impressively demonstrates that reducing bureaucracy and climate protection need not be mutually exclusive," said VDMA managing director Thilo Brodtmann.

"For the mechanical and plant engineering sector in particular, it is essential that reporting obligations focus on genuinely relevant trade flows," he added.

Companies, Brodtmann stressed, “should not have to expend the same effort on minor supply relationships as on large import volumes.”

The study, based on data from members of European industry associations ACEA, CLEPA and VDMA, recommends introducing a second exemption threshold alongside the existing 50-tonne annual limit per importer.

Under the study's proposal, individual importer-supplier relationships involving less than one tonne of imports would also be exempt from CBAM requirements.

According to the study, the existing mechanism exempts around 54% of importers but only 9.5% of supplier relationships, while covering 99.5% of embedded emissions.

Adopting the proposed additional threshold would increase these exemptions to nearly 56% of importers and 74% of supplier relationships, while retaining coverage of 98.5% of emissions, the researchers calculated.

The recommendations are separate from the European Commission's proposal to extend CBAM to additional downstream products, which is currently undergoing the EU legislative process.

According to VDMA, CBAM is particularly complex and costly for machinery manufacturers because their supply chains often involve numerous suppliers, components and comparatively small individual quantities.

Emissions data must be obtained, verified and documented for each affected supply relationship, making the administrative effort disproportionate for small import volumes.

The association said the proposed reform would not require additional data collection, as the necessary information was already available in the CBAM system.

"The German government should advocate in Brussels for using the next CBAM review to implement such practical simplifications," Brodtmann said.

"Europe needs effective climate protection, but also competitive companies and streamlined procedures."