The Carbon Border Adjustment Mechanism (CBAM) is an EU regulatory instrument whose importance for global trade will steadily increase in the coming years. Why? Because it introduces additional charges on CO₂ emissions linked to the production of selected goods imported into the European Union. The aim of CBAM is to prevent the relocation of energy-intensive production outside the EU to countries with less stringent climate policies.
The mechanism currently covers products from high carbon-footprint sectors—primarily steel, iron, and aluminum, which dominate the import structure subject to CBAM. In addition, it applies to cement, fertilizers, electricity, and hydrogen. CBAM concerns imports from third countries that do not participate in the EU ETS (Emissions Trading System). Exceptions include products originating from Iceland, Liechtenstein, Norway, and Switzerland—countries already integrated into the EU emissions trading market.
First Reporting, Then Payments
At present, CBAM is in its transitional phase, which will last until the end of 2025. During this period, importers are not yet required to pay fees but must submit quarterly reports on the CO₂ emissions embedded in imported goods. These reports must be based on actual data provided by producers. If suppliers cannot provide such data, the importer must file a report using so-called “default values.” In practice, this can result in inflated reported emissions—and consequently, higher costs once CBAM becomes fully operational.
Importers must also document their attempts to obtain real data. The absence of such evidence—such as correspondence with suppliers—may lead to additional inspections by the European Commission. All documentation of supplier communications should therefore be archived and attached to submitted reports.
From 2026, CBAM will enter its operational phase. In addition to reporting obligations, importers will be required to purchase CBAM certificates, with the number of certificates corresponding to the level of emissions embedded in their imports. Companies that are already aligning with CBAM requirements—by collecting emissions data from suppliers, standardizing reporting processes, and archiving documentation—will be better prepared for the upcoming obligations. This preparation translates directly into reduced operational and cost risks.
A lack of proper readiness could result not only in financial penalties but also in the loss of authorized declarant status—effectively blocking the ability to import CBAM-covered goods.
CBAM: Simplifications Ahead and Plans for Expansion
In recent months, the European Commission has announced changes under the Omnibus package, aimed at partially easing administrative and reporting obligations associated with CBAM. These proposals are designed to reduce the burden, particularly for smaller importers, and to enhance transparency and predictability across the system.
One key change is raising the annual import threshold subject to reporting obligations to 50 tons per year. This means many small importers will be exempt from filing quarterly reports, significantly reducing the number of entities subject to CBAM reporting. Other planned simplifications include streamlined importer authorization procedures, more practical methods of calculating emissions embedded in goods, and clearer rules for data reporting.
From 2027, importers will also gain the ability to account for carbon costs already paid in third countries using national average data. This measure is intended to mitigate the risk of double taxation—both in the country of production and at the EU border. This is particularly important for importers working with producers from countries that have already implemented their own carbon pricing systems.
The Omnibus package also signals further steps ahead: the gradual expansion of CBAM to additional sectors and products in the coming years. This means that more companies—even outside the currently targeted industries—should begin analyzing the potential impact of CBAM on their business.
CBAM: Barrier or Opportunity?
CBAM is not just another environmental regulation—it represents a new model of approaching international trade. For some businesses, it may prove to be a barrier. But for those who prepare early and take proactive measures, it could become a genuine competitive advantage.
The Omnibus package offers businesses some additional flexibility, but it does not relieve them of responsibility. This is why it is crucial to work with an experienced partner who understands the complexity of the mechanism and can turn compliance into a strategic asset.
Author: Dagmara Barwa, Deputy Customs Product Director, Rohlig SUUS Logistics
Source: CEO.com.pl
