CBAM (Carbon Border Adjustment Mechanism) is an EU mechanism that has been in effect since October 1st, 2023, based on the Regulation (EU) 2023/956 of the European Parliament and the Council from May 10th, 2023. It aims to tax the import of high-emission products, such as cement, electricity, fertilizers, iron and steel, aluminum, and chemicals. The purpose of CBAM is to minimize the risk of “carbon leakage” outside the EU, which occurs when production relocates to countries with less stringent emission regulations. CBAM is part of the “Fit for 55” package, which aims to reduce greenhouse gas emissions in the EU by 55% by 2030 compared to 1990 levels.
Since October 2023, a transitional period has begun, lasting until the end of 2025. During this time, importers are required to submit quarterly reports on emissions associated with imported goods, but they are not required to pay the tax. The first report for Q4 2023 had to be submitted by January 31st, 2024, with subsequent reports due by the end of April, July, and October 2024. Each report should include information on the quantity of goods, their actual emissions, and any applicable CO2 emission charges in the country of origin. Currently, customs authorities in Poland will inform importers about reporting obligations. In Poland, the functions of the competent authority for CBAM are carried out by the National Centre for Emissions Management (KOBiZE), which will support the European Commission in verifying and monitoring compliance with the regulations.
Starting January 1st, 2026, there will be a requirement to submit annual declaration by May 31st and to acquire special CBAM certificates and gather permits for importing goods covered by this mechanism. The goal of CBAM is to level the playing field for producers within and outside the EU and to prevent the relocation of production to countries with lower environmental standards. CBAM aims to equalize the costs associated with CO2 emissions for imported goods and EU goods covered by the EU ETS system. This prevents the transfer of production to countries with less stringent climate protection standards, which could lead to increased global emissions and undermine the EU’s efforts to reduce greenhouse gas emissions.
It is noteworthy that EU regulations provide for the possibility of controlling companies in terms of compliance with the obligations arising from CBAM. Penalties for unreported CO2 emissions are already being applied in the first phase of the mechanism’s implementation. The basis for imposing financial penalties is the failure to take actions to submit or correct an incorrect or incomplete CBAM report. Penalties can range from 10 to 50 euros per ton of unreported emissions.
The introduction of the CBAM mechanism represents a significant strengthening of sustainable development activities in the spirit of ESG. CBAM will reduce the attractiveness of CO2 emitting sectors of the economy, thereby influencing the development of new low carbon technologies, increasing the transparency of business and its impact on the life of local communities. It will become less profitable to relocate production outside the EU.
