CBAM

Glossary category

What is CBAM?

CBAM, the Carbon Border Adjustment Mechanism, is an EU regulatory instrument that applies to the import of selected carbon-intensive goods into the European Union. Its purpose is to reduce the risk of carbon leakage, meaning the relocation of production to jurisdictions with less stringent climate rules, and to align the carbon cost of certain imported goods with the carbon cost borne by EU producers under the EU Emissions Trading System.

CBAM was established by Regulation (EU) 2023/956 of the European Parliament and of the Council. The mechanism applies to specific categories of goods listed in Annex I to that Regulation, including cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. The scope is defined by reference to customs classification, so the correct CN code of the imported product is essential for determining whether CBAM obligations apply.

CBAM is relevant not only for importers, but also for manufacturers, distributors, customs representatives and companies managing international supply chains. The mechanism combines elements of customs law, environmental regulation, compliance reporting, contractual risk allocation and tax-related analysis. In practice, CBAM requires companies to obtain reliable emissions data from non-EU suppliers and to integrate that data into import and compliance processes.


What does CBAM involve?

CBAM obligations differ depending on the phase of application. Under Regulation (EU) 2023/956, the transitional period ran from 1 October 2023 to 31 December 2025. During this period, importers were required to submit CBAM reports containing information on imported goods and embedded emissions, but they did not yet have to purchase or surrender CBAM certificates. Detailed reporting rules for the transitional period are set out in Commission Implementing Regulation (EU) 2023/1773.

Since 1 January 2026, the definitive CBAM system applies under Regulation (EU) 2023/956. In that phase, imports of covered goods must generally be made by an authorised CBAM declarant, and the declarant is required to purchase and surrender CBAM certificates corresponding to the embedded emissions of the imported goods, subject to adjustments such as a carbon price effectively paid in the country of origin where the Regulation allows it.

For businesses, CBAM compliance usually starts with product classification. A company must determine whether the imported goods fall within the CN codes covered by the CBAM Regulation. The next step is to identify the relevant installation, production route and embedded emissions. This often requires cooperation with non-EU producers, access to technical data and review of supplier declarations. Where actual emissions data is unavailable or incomplete, companies must assess whether default values or alternative methods may be used under the applicable rules.

CBAM may also affect commercial contracts. Importers often need to introduce clauses requiring suppliers to provide emissions data, supporting documents and audit assistance. Contracts may also need to address liability for incorrect data, delays in reporting, changes in EU legislation and additional costs linked to CBAM certificates. Without clear contractual provisions, the financial and compliance burden may remain uncertain or be difficult to enforce against the supplier.


When should legal support be considered?

Legal support may be needed when a company imports goods from outside the EU, uses customs procedures involving CBAM-covered products, or purchases components that may fall within the scope of the mechanism. It is also relevant where a company is restructuring its supply chain, changing suppliers, negotiating long-term supply contracts or assessing the regulatory cost of importing materials into Poland or another EU Member State.

Private law, customs law and regulatory compliance issues frequently overlap in CBAM matters. An incorrect CN code may lead to a wrong conclusion on whether CBAM applies. Incomplete emissions data may result in inaccurate reporting. A lack of contractual safeguards may make it difficult to obtain information from suppliers or recover costs. For corporate groups, additional issues may arise when data, import functions and purchasing decisions are split between different entities.

A timely consultation with a lawyer can help identify CBAM obligations before goods are imported, before a contract is signed or before a reporting deadline approaches. Early analysis may reduce the risk of reporting errors, customs disputes, contractual claims, administrative exposure and unexpected financial costs connected with CBAM certificates or supply chain adjustments.


Legal support in CBAM matters

Support of a law firm in CBAM-related matters may include in particular:

  • assessment of whether imported goods fall within the scope of Regulation (EU) 2023/956;
  • review of CN codes and cooperation with customs advisers where classification issues arise;
  • analysis of CBAM reporting obligations for the transitional period and the definitive period;
  • preparation or review of contractual clauses concerning emissions data and supplier liability;
  • support in communication with suppliers, customs representatives and group companies;
  • assessment of legal risks related to missing, incomplete or inconsistent emissions data;
  • advice on internal CBAM compliance procedures and allocation of responsibilities;
  • support with the definitive CBAM system applicable since 2026.

CBAM is a compliance issue with direct operational and financial consequences. Companies importing covered goods should verify their obligations, data flows and contracts in advance.

Need assistance with CBAM? Contact us.


See also

  • Commercial Law
  • Corporate tax
  • Tax Law
  • Financial reporting