Lawmakers backed a plan to exclude 90 percent of importers from the Carbon Border Adjustment Mechanism (CBAM), as they are responsible for a negligible part of the emissions targeted by the levy.
"This approach enables us to simplify matters for companies without dismantling or weakening the CBAM," said centre-left European lawmaker Antonio Decaro.
Adopted in 2022, the CBAM imposes a carbon price on imports of goods such as steel, aluminium and cement from countries with lower environmental standards.
In practice, the importer will have to declare the emissions directly linked to the production process, and if these exceed the European standard, acquire an "emission certificate" at the price of CO2 in the European Union.
A test period began in October 2023 before the law's full entry into force in 2026.
But on Thursday lawmakers voted 564-20 for amendments put forward by the European Commission to apply the levy only to firms importing goods with a minimum mass threshold of 50 tonnes per year.
This would exempt small importers at little environmental cost as 99 percent of total CO2 emissions from targeted imports would still be covered by the rules, according to Brussels.
Parliament will not start negotiations with member states to finalise the text.
The move comes amid a broader EU drive to slash red tape seen as hindering businesses, amid slow growth and international trade tensions.
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