CBAM—the EU’s Carbon Border Adjustment Mechanism designed to factor CO₂ emissions into border pricing—was intended to serve as a shield for European industry. According to representatives of the ORLEN Group, while the concept is sound in theory, the system still needs significant refinement. In the fertilizer sector, they say, there are already examples of the new mechanism being circumvented. As they emphasize, in some industries the rules must be tightened, while in others the EU should abandon implementation altogether.
“CBAM, introduced by the European Union, can be a fairly good system for protecting the European market and European industry. However, we still don’t see the effects of these regulations in practice. In our view, they are significantly underdeveloped. Either we focus on protection, or we allow part of the market to operate regardless and bypass CBAM rules,” Witold Literacki, Vice President of the Management Board for Corporate Affairs at ORLEN S.A., told Newseria.
CBAM (Carbon Border Adjustment Mechanism) is the EU’s framework for adjusting the cost of certain imported goods to reflect the greenhouse-gas emissions generated during their production in third countries. The mechanism was introduced to counter so-called carbon leakage—when companies based in the EU relocate high-emission production abroad to jurisdictions with less stringent climate policy and then export the output back into the EU. In that scenario, EU-made products are displaced by cheaper imports with a higher carbon footprint. Under CBAM, imported goods are also meant to bear a carbon cost, eliminating a competitive advantage rooted in low-cost but climate-damaging production.
“The idea of CBAM is good—but should we base the development of the EU economy and production in the European Union solely on this instrument? Honestly, no,” Literacki stresses. “We should be competitive on our own merits, not rely exclusively on restricting the inflow of cheaper products from outside the EU.”
CBAM is meant to protect the competitiveness of the economy and support the retention of existing industrial jobs and the creation of new ones across the EU. The problem, experts argue, is that the mechanism is not yet working as intended.
“There is circumvention of CBAM rules in fertilizers, which are very important to us,” Literacki says. “Anwil is facing major difficulties because of an unbelievably large inflow of fertilizers from Russia and Belarus—outside the EU—produced in ways that do not comply with the climate rules imposed by the European Union. Yet they flood the European market and, unfortunately, are destroying our plants.”
According to Eurostat data, in the third quarter of 2025 Russia was the EU’s second-largest supplier of fertilizers, accounting for 13% of fertilizer imports from outside the bloc (down from more than 33% the previous quarter). Some Russian and Belarusian fertilizers—including nitrogen-, phosphate-, and potash-based products—were not subject to restrictions or import duties until mid-last year, when the EU imposed duties and controls.
“In our chemical business, limiting the inflow of fertilizers from Russia could help,” Literacki argues. “By buying fertilizers from the East, the European Union would effectively be using its own money—earned in the EU—to finance the war against Ukraine.”
European Commission data show that fertilizer imports into the EU fell from nearly 2.5 million tonnes in January 2025 to 1.1 million tonnes in January 2026. Farmer organizations concerned about the situation claim this decline is a direct result of CBAM-related charges. Fertilizers Europe, representing European fertilizer producers, argues that multiple factors contributed to the drop, including a nearly twofold increase in fertilizer inflows in December 2025 compared with a year earlier.
Poland’s Chamber of Chemical Industry has also highlighted the risk of CBAM circumvention. Even so, CBAM is widely seen as an important protective tool that helps level the playing field between producers inside and outside the EU. Among the chamber’s proposals are stronger anti-circumvention measures—for example, more effective control mechanisms and a reinforced verification framework.
“There are industries where CBAM should work, but unfortunately it doesn’t,” Literacki says. “Right now, it is not being fully utilized. In our view, there are also areas where CBAM should not apply at all. Take crude oil or gas that we import from outside the EU. Imposing a tax on these energy sources would simply raise prices for consumers—so it would be misguided. This tool should be used, but wisely and with common sense.”
CBAM currently covers goods from sectors such as fertilizers, cement, iron and steel, and aluminium, as well as electricity and hydrogen. However, charges apply only to specific products identified by the relevant CN (Combined Nomenclature) codes.
Concerns about the system’s integrity are also voiced by representatives of the cement industry. They warn that without an effective CBAM, cheap cement from outside the EU will continue to compete with European production. Poland’s Cement Producers Association estimates that a record 1.7 million tonnes of cement may have entered Poland via imports last year, including nearly 1 million tonnes from Ukraine.
CBAM and its impact on European industry was one of the topics discussed at the expert debate “Poland 2026. Horizon of Change,” organized by the European Commission, the European Parliament, and Newseria. ORLEN served as the strategic partner of the event.
