The Court of Justice of the European Union dismissed Poland’s challenge to the CBAM on 12 November 2026. In its judgment in Poland v Parliament and Council, the Court upheld the environmental legal basis used to adopt the regulation, which remains in force.
Why the voting procedure was disputed
Poland argued that CBAM was primarily fiscal: it imposed compulsory financial obligations on importers and generated revenue. Under the EU treaties, that classification would have required unanimous approval in the Council, rather than adoption through the ordinary legislative procedure used for environmental measures.
The Court examined the mechanism’s purpose and design. It identified the environmental objective of preventing carbon leakage, including the relocation of production and emissions, while encouraging lower-emission production outside the EU. It treated revenue from certificates as a consequence of applying the mechanism. That assessment supported the environmental legal basis and the procedure the EU institutions had used.
Why the certificate price mattered
Poland also argued that CBAM lacked the market character of the EU ETS, pointing to its separate certificates and administratively calculated prices.
The Court traced the price signal back to auctions of EU ETS allowances. Because CBAM certificate prices follow that market, it considered the mechanism indirectly market-based. The distinction concerns how the carbon cost is determined: the price attached to a given quantity of embedded emissions can change as the allowance market moves.
The ruling therefore upheld a mechanism that applies the EU carbon-price signal to covered imports through a separate certificate system. Its financial obligations were consistent with the environmental legal basis accepted by the Court.
