Effective as of 1 October 2023, Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a carbon border adjustment mechanism (CBAM Regulation) introduced a so-called carbon tax on emission-intensive goods imported into EU from third countries (including cement, electricity, fertilizers, iron, steel, aluminium and hydrogen).

And 1 January 2026 will be the effective date of the final CBAM model whereby importers of certain categories of goods will be required to:

  • ensure they have the authorised CBAM declarant status before importing any of such goods,
  • submit an annual CBAM declaration (the first one will be for 2026) via the permanent CBAM registry,
  • account for the emissions embedded in the imported goods by purchasing an appropriate number of CBAM certificates whose prices will depend on the average price of EU carbon allowances.

Give the very detailed disclosures, CBAM reports and declarations can be a significant challenge and will require adequate preparations as well as specific data collection processes.

All importers of goods falling within the CBAM Regulation should promptly check their related reporting obligations.

Note also that, as part of its Omnibus I package, the European Commission published a proposal on 26 February 2025 to simplify the carbon border adjustment mechanism. Among other things, the Commission proposes moving the CBAM certificate sales to 2027 and increasing penalties for non-compliance. The proposal is yet to be enacted into law.

Note further that there is a CBAM transitional period until 31 December 2025 during which importers may have certain interim obligations, including registration in the interim registry (via PUESC) and submission of quarterly CBAM reports, first of which had to be filed by 31 January 2024 by reference to Q4’2023.

If this issue pertains to your business and you are interested in our assistance, please contact us.

This blog post is provided for general information purposes to keep you up-to-date with changes in tax law, tax rulings by authorities, case law of courts and interesting commentaries. Doradztwo Podatkowe WTS&SAJA shall not be held legally liable for any acts or omissions resulting from reliance on such information.