CBAM (Carbon Border Adjustment Mechanism)

What is CBAM?

CBAM (Carbon Border Adjustment Mechanism) is a mechanism for adjusting prices at borders taking into account CO2 emissions, thus being an integral part of the „Fit for 55” package. The initiative developed by the EU aims to prevent the transfer of CO2 emissions beyond member countries by applying additional charges on imported products based on their carbon footprint. In this way, European companies remain competitive on the business market, and promote action to reduce greenhouse gas emissions at the same time.

What are the stages of implementation?

In the first stage (from October 1, 2023 to December 31, 2025), the so-called transitional period, importers are required to report CO2 emissions of goods covered by this regulation. Importantly, in order to submit a report, a company must obtain the status of a CBAM reportant. The report should include:

• Name, surname/company, addresses and contact details
• total quantity of each type of goods in tonnes or MWh
• actual total level of built-in emissions (in tonnes of CO2 equivalent)
• total indirect emissions;
• carbon tax data in the country of origin

In the second stage (from 1 January 2026), EU importers will be required to purchase CBAM certificates in an amount corresponding to the emissions resulting from the production of goods. Additionally, in accordance with Article 6 of the CBAM Regulation, they will be required to submit an annual declaration by 31 May each year, in which they will indicate the total number of CBAM certificates purchased in the previous calendar year and which they will have to purchase and cancel.

Legal consequences

Currently, failure to take action to submit a report or submitting an incomplete report may result in financial penalties being imposed on importers. They range from 10 to 50 EURO for each tonne of undeclared emissions.