CBAM 2026: CO2 Emission Reporting for EU Importers

CBAM, the Carbon Border Adjustment Mechanism, is an instrument introduced by EU Regulation 2023/956 that requires importers of goods from outside the EU to cover the cost of CO2 emissions embedded in the products they bring in. After a two-year transitional period (1 October 2023 – 31 December 2025), during which only quarterly reporting was required with no payments due, the definitive period began on 1 January 2026. This means companies importing cement, steel, aluminium, fertilisers, electricity, or hydrogen must now file annual declarations and purchase CBAM certificates priced in line with EU ETS allowances. For businesses registered in Poland, the national CBAM authority is KOBiZE (Krajowy Ośrodek Bilansowania i Zarządzania Emisjami — the National Centre for Emissions Management), operating under the Ministry of Climate and Environment (MKiŚ).

What is CBAM and why does it exist?

The European Union has long pursued ambitious climate policy through the EU ETS (Emissions Trading System), which requires European manufacturers to purchase CO2 emission allowances. The problem was that producers in third countries — China, Turkey, India, and others — bore no equivalent cost, giving them a competitive advantage and driving so-called carbon leakage (the relocation of emissions-intensive production outside the EU). CBAM levels the playing field: an importer of goods produced outside the EU pays for embedded CO2 emissions at the same rate a European manufacturer would pay under EU ETS.

This mechanism is part of the "Fit for 55" legislative package and directly affects international trade. If your company imports goods from third countries and handles WNT (intra-Community acquisition) or WDT (intra-Community supply) transactions, you should verify whether any of those products fall under CBAM.

Which sectors and goods does CBAM cover?

CBAM covers six high-emission sectors:

• Cement — clinker, Portland cement, aluminous cements
• Electricity — electrical energy imported from outside the EU
• Fertilisers — nitrogen-based, phosphate, mixed (including urea, ammonium nitrate)
• Iron and steel — pig iron, ferro-alloys, rolled steel products, pipes, wire
• Aluminium — unwrought aluminium, aluminium products, foils
• Hydrogen — added to the list from 2024 as a strategic energy carrier

Each sector is defined by specific CN codes (Combined Nomenclature) in Annex I of Regulation 2023/956. If your business runs an online store that imports goods, check the customs codes of your purchases — some steel products or aluminium items may fall under CBAM even in relatively small quantities.

The de minimis threshold — who is exempt from CBAM?

Not every importer faces full CBAM obligations. The Regulation provides a mass-based de minimis threshold: if your total annual import of CBAM-covered goods is below 50 tonnes, you do not need to register as an authorised CBAM declarant. Important: this is 50 tonnes of CBAM-covered goods, not 50 tonnes of CO2 emissions.

Exceeding this threshold triggers the obligation to:

• Register as an authorised CBAM declarant with the national authority (KOBiZE/MKiŚ in Poland)
• File annual CBAM declarations
• Purchase and surrender CBAM certificates

Small importers below the 50-tonne threshold only need to maintain records and provide data upon request from customs authorities.

The CBAM procedure step by step

The entire process consists of four key stages that every importer above the de minimis threshold must complete:

1. Register as an authorised CBAM declarant — submit an application to the national authority (KOBiZE in Poland). Without this status, you cannot legally import CBAM goods above the 50-tonne annual threshold.
2. Monitor and calculate embedded emissions — obtain actual CO2 emissions data per tonne of product from your third-country supplier, or apply default values published by the European Commission.
3. Purchase CBAM certificates — certificates are bought from the national authority at a price matching the quarterly average EU ETS allowance price (in 2026), expressed in euros per tonne of CO2. From 2027, pricing will be based on weekly averages.
4. Surrender certificates — by 31 May each year for the preceding year, you must surrender certificates equal to the tonnes of CO2 embedded in your imports. The first surrender deadline: 31 May 2027 for the year 2026.

The European Commission has already published the first CBAM certificate prices for Q1 2026 on its official website, allowing importers to calculate their costs.

How much do CBAM certificates cost in 2026?

CBAM certificate prices are directly linked to EU ETS allowance prices. In 2026, the pricing mechanism is based on the quarterly average EU ETS auction price. With current EU ETS prices hovering around €60–70 per tonne of CO2, the annual CBAM cost for a mid-size steel importer could range from tens of thousands to several hundred thousand euros.

Year	Pricing method	Reduction in free EU ETS allowances	Effective CBAM cost
2026	Quarterly average EU ETS	2.5%	Low (most sectors still receive free allowances)
2027	Weekly average EU ETS	5%	Rising
2028	Weekly average EU ETS	10%	Moderate
2029	Weekly average EU ETS	22.5%	Significant
2030	Weekly average EU ETS	48.5%	High
2034	Weekly average EU ETS	100%	Full (no free allowances remain)

The key mechanism: in 2026, importers only pay for 2.5% of emissions because European producers still receive 97.5% of their allowances for free. As free allowances are phased out, CBAM costs will rise year on year, reaching the full EU ETS price for every tonne of embedded CO2 by 2034.

Free allowance phase-out schedule

One of CBAM's most critical aspects is the linear phase-out of free allowances for EU producers in covered sectors. This schedule directly determines the effective cost of CBAM certificates for importers:

Year	Reduction in free allowances	Remaining free allowances
2026	2.5%	97.5%
2027	5%	95%
2028	10%	90%
2029	22.5%	77.5%
2030	48.5%	51.5%
2034	100%	0%

In practical terms, in 2026 an importer only needs to buy certificates covering 2.5% of embedded emissions — the rest is offset by the free allowances that EU producers still receive. But be warned: by 2030 the cost will increase nearly 20-fold, and by 2034 it will reach 100%. Businesses should start planning their procurement strategy and considering supplier diversification now.

CBAM and VAT on imports — what changes?

CBAM does not replace customs duties or import VAT — it is an additional charge on top of both. Importers still pay:

• Customs duty at the Common Customs Tariff rates
• Import VAT (23% in Poland, deductible as input VAT)
• In addition: CBAM certificates for embedded CO2 emissions

CBAM certificates are not a tax in the traditional sense — they are an environmental instrument. They cannot be deducted like input VAT, but they can be recognised as a tax-deductible business expense under the CIT and PIT acts (PDOP and PDOF respectively). For businesses using KPiR (Księga Przychodów i Rozchodów — the simplified revenue-and-expense ledger), CBAM certificate costs are recorded as other operating expenses (column 13).

If you sell cross-border and use the VAT OSS procedure for EU sales, remember that CBAM applies exclusively to imports from third countries (outside the EU) — intra-Community acquisitions (WNT) are not covered.

Who is responsible for CBAM in Poland?

In Poland, the national CBAM authority is KOBiZE (Krajowy Ośrodek Bilansowania i Zarządzania Emisjami — the National Centre for Emissions Management), operating within the Institute of Environmental Protection — National Research Institute, under the supervision of the Ministry of Climate and Environment (MKiŚ). Importers submit the following to KOBiZE:

• Application for authorised CBAM declarant status
• Annual CBAM declaration (the first is due by 31 May 2027 for the year 2026)
• Orders for CBAM certificate purchases

KOBiZE also maintains the national CBAM registry, which records all certificates — purchased, surrendered, and unused. Importers have the right to sell back (buy-back) unused certificates to the national authority — up to one-third of those purchased in a given year.

Penalties for CBAM non-compliance

The European Commission has established severe penalties for failing to meet CBAM obligations:

• No registration as authorised declarant while importing above 50 tonnes/year — ban on further CBAM goods imports + administrative fine
• Inaccurate emissions reporting — penalty of approximately €50 per tonne of incorrectly reported CO2 emissions
• Failure to surrender the required number of certificates by 31 May — penalty of 3–5× the CBAM certificate price for each missing tonne of CO2
• Deliberate underreporting of emissions — criminal sanctions combined with mandatory purchase of missing certificates at current market price

At a certificate price of around €65/tonne, a 5× penalty means €325 per tonne of CO2 — at the current exchange rate (~4.30 PLN/EUR) that comes to nearly 1,400 PLN per tonne of unreported emissions. For an importer bringing in 1,000 tonnes of steel with an emissions intensity of 2 tonnes CO2 per tonne of product, failure to surrender certificates could cost up to 2.8 million PLN in penalties.

Most common mistakes

• Not checking CN codes: Many companies fail to verify whether their imported goods (e.g. steel components, aluminium profiles) fall under CBAM-covered CN codes. The CN code of the product determines the obligation — not its trade name.
• Misunderstanding the 50-tonne threshold: The threshold applies to the mass of CBAM goods, not the mass of CO2 emissions. An importer of 60 tonnes of aluminium profiles is covered even if the embedded emissions are relatively low.
• Relying solely on default values: The European Commission publishes default emission values, but these are typically higher than actual figures. Obtaining data directly from your supplier can significantly reduce your certificate costs.
• Ignoring indirect emissions: In certain sectors (cement, fertilisers), CBAM also covers indirect emissions from electricity consumed during production. Omitting these risks penalties for inaccurate reporting.
• Missing the 31 May deadline: Certificate surrender has a hard deadline. No extensions are granted — penalties of 3–5× the certificate price are applied automatically after the date passes.
• Treating CBAM as a one-off obligation: This is an ongoing process — monitoring supplier emissions, updating data, filing annual declarations, and surrendering certificates. It requires continuous management.

How to prepare your business for CBAM — a practical checklist

If your company imports goods in CBAM-covered sectors from third countries, follow these steps:

1. Audit your CN codes — review all imported goods and identify those covered by Annex I of Regulation 2023/956.
2. Calculate your annual volume — do you exceed the 50-tonne threshold for CBAM goods per year?
3. Register with KOBiZE — submit your application for authorised CBAM declarant status if you exceed the threshold.
4. Contact your suppliers — request actual CO2 emissions data per unit of product (specific embedded emissions).
5. Plan your certificate budget — calculate: tonnes imported × emission intensity × % free-allowance reduction (2.5% in 2026) × EU ETS price.
6. Implement a monitoring procedure — the annual declaration requires continuous data collection over 12 months.
7. Consult a tax adviser — especially regarding how to account for CBAM certificates in CIT/PIT filings and their impact on margin calculations.

FAQ

Does CBAM apply to imports from other EU countries?

No. CBAM applies exclusively to imports from third countries (outside the European Union). Intra-Community acquisitions (WNT) from other EU Member States are not covered, because EU manufacturers already bear emission costs under the EU ETS. If you buy steel from Germany or cement from Czechia — CBAM does not apply. But if you import the same products from Turkey, China, or Russia — the obligation arises.

What will CBAM actually cost a steel importer in 2026?

Assuming: 500 tonnes of rolled steel imported, emission intensity of ~1.8 t CO2/t of product, EU ETS price of €65/t, free-allowance reduction of 2.5%. Calculation: 500 × 1.8 × 0.025 × €65 = €1,462.50 (approximately 6,300 PLN). By 2030, the same import will cost: 500 × 1.8 × 0.485 × €65 = €28,372.50 (approximately 122,000 PLN). That is a nearly 20-fold increase within just four years.

What if my third-country supplier refuses to provide emissions data?

In that case, you must apply the default values published by the European Commission. These are typically higher than actual emissions, meaning higher certificate costs. In practice, this creates a strong incentive to switch to a supplier that provides data — or to negotiate with your existing one. Some companies are now including CBAM clauses in their trade agreements, contractually obligating suppliers to deliver emissions data.

Does a JDG (sole trader) importing aluminium fall under CBAM?

Yes — legal form is irrelevant. A JDG (Jednoosobowa Działalność Gospodarcza — sole proprietorship) importing more than 50 tonnes of aluminium products annually from third countries is subject to full CBAM obligations: registration as an authorised declarant, annual declarations, and certificate purchases. Below 50 tonnes, only record-keeping duties apply — no registration or certificate purchase required.

Can CBAM certificates be deducted from tax?

CBAM certificates cannot be deducted like input VAT. However, they do qualify as tax-deductible business expenses under the CIT and PIT acts (PDOP and PDOF). A business using KPiR records them in column 13 (other expenses), while a company on full accrual accounting treats them as an operating cost in account group 4 (external services or taxes and charges, depending on the accounting policy adopted). They are not a customs cost and do not form part of the import VAT base.

Key takeaways

CBAM in 2026 marks the beginning of a new era in international trade with the EU. Although the effective certificate cost is modest in the first year (the free-allowance reduction is just 2.5%), the phase-out schedule is relentless — by 2034, importers will pay the full EU ETS price for every tonne of embedded CO2. Businesses that fail to implement emissions monitoring, register with KOBiZE, and systematically collect data from suppliers now face penalties of around €50/tonne for incorrect reporting or 3–5× the certificate price for failure to surrender. Key dates: register as an authorised CBAM declarant (as soon as possible), collect emissions data throughout 2026, and surrender your first certificates by 31 May 2027. Do not wait until the last moment — CBAM costs will only go up.