diff --git a/README.md b/README.md
index 1bf1f0f..511cde0 100644
--- a/README.md
+++ b/README.md
@@ -17,7 +17,7 @@ The package can be installed by adding `membrane_transcoder_plugin` to your list
 ```elixir
 def deps do
   [
-    {:membrane_transcoder_plugin, "~> 0.2.2"}
+    {:membrane_transcoder_plugin, "~> 0.3.0"}
   ]
 end
 ```
diff --git a/lib/transcoder.ex b/lib/transcoder.ex
index 625a56d..c6a1420 100644
--- a/lib/transcoder.ex
+++ b/lib/transcoder.ex
@@ -80,16 +80,35 @@ defmodule Membrane.Transcoder do
                 and is supposed to return the desired output stream format or its module.
                 """
               ],
-              force_transcoding?: [
-                spec: boolean() | (stream_format() -> boolean()),
-                default: false,
+              transcoding_policy: [
+                spec:
+                  :always
+                  | :if_needed
+                  | :never
+                  | (stream_format() -> :always | :if_needed | :never),
+                default: :if_needed,
                 description: """
-                If set to `true`, the input media stream will be decoded and encoded, even
-                if the input stream format and the output stream format are the same type.
+                Specifies, when transcoding should be applied.
 
                 Can be either:
-                * a boolean,
-                * a function that receives the input stream format and returns a boolean.
+                * an atom: `:always`, `:if_needed` (default) or `:never`,
+                * a function that receives the input stream format and returns either `:always`,
+                  `:if_needed` or `:never`.
+
+                If set to `:always`, the input media stream will be decoded and encoded, even
+                if the input stream format and the output stream format are the same type.
+
+                If set to `:if_needed`, the input media stream will be transcoded only if the input
+                stream format and the output stream format are different types.
+                This is the default behavior.
+
+                If set to `:never`, the input media stream won't be neither decoded nor encoded.
+                Changing alignment, encapsulation or stream structure is still possible. This option
+                is helpful when you want to ensure that #{inspect(__MODULE__)} will not use too much
+                of resources, e.g. CPU or memory.
+
+                If the transition from the input stream format to the output stream format is not
+                possible without decoding or encoding the stream, an error will be raised.
                 """
               ],
               assumed_input_stream_format: [
@@ -152,8 +171,8 @@ defmodule Membrane.Transcoder do
       |> resolve_output_stream_format()
 
     state =
-      with %{force_transcoding?: f} when is_function(f) <- state do
-        %{state | force_transcoding?: f.(format)}
+      with %{transcoding_policy: f} when is_function(f) <- state do
+        %{state | transcoding_policy: f.(format)}
       end
 
     spec =
@@ -161,7 +180,7 @@ defmodule Membrane.Transcoder do
       |> plug_transcoding(
         format,
         state.output_stream_format,
-        state.force_transcoding?
+        state.transcoding_policy
       )
       |> get_child(:output_funnel)
 
@@ -203,15 +222,15 @@ defmodule Membrane.Transcoder do
     end
   end
 
-  defp plug_transcoding(builder, input_format, output_format, force_transcoding?)
+  defp plug_transcoding(builder, input_format, output_format, transcoding_policy)
        when Audio.is_audio_format(input_format) do
     builder
-    |> Audio.plug_audio_transcoding(input_format, output_format, force_transcoding?)
+    |> Audio.plug_audio_transcoding(input_format, output_format, transcoding_policy)
   end
 
-  defp plug_transcoding(builder, input_format, output_format, force_transcoding?)
+  defp plug_transcoding(builder, input_format, output_format, transcoding_policy)
        when Video.is_video_format(input_format) do
     builder
-    |> Video.plug_video_transcoding(input_format, output_format, force_transcoding?)
+    |> Video.plug_video_transcoding(input_format, output_format, transcoding_policy)
   end
 end
diff --git a/lib/transcoder/audio.ex b/lib/transcoder/audio.ex
index 559b9b1..e2dfe5f 100644
--- a/lib/transcoder/audio.ex
+++ b/lib/transcoder/audio.ex
@@ -52,17 +52,18 @@ defmodule Membrane.Transcoder.Audio do
           audio_stream_format(),
           boolean()
         ) :: ChildrenSpec.builder()
-  def plug_audio_transcoding(builder, input_format, output_format, force_transcoding?)
+  def plug_audio_transcoding(builder, input_format, output_format, transcoding_policy)
       when is_audio_format(input_format) and is_audio_format(output_format) do
-    do_plug_audio_transcoding(builder, input_format, output_format, force_transcoding?)
+    do_plug_audio_transcoding(builder, input_format, output_format, transcoding_policy)
   end
 
   defp do_plug_audio_transcoding(
          builder,
          %format_module{},
          %format_module{},
-         false = _force_transcoding?
-       ) do
+         transcoding_policy
+       )
+       when transcoding_policy in [:if_needed, :never] do
     Membrane.Logger.debug("""
     This bin will only forward buffers, as the input stream format is the same as the output stream format.
     """)
@@ -74,12 +75,20 @@ defmodule Membrane.Transcoder.Audio do
          builder,
          %RemoteStream{content_format: Opus},
          %Opus{},
-         false = _force_transcoding?
-       ) do
+         transcoding_policy
+       )
+       when transcoding_policy in [:if_needed, :never] do
     builder |> child(:opus_parser, Opus.Parser)
   end
 
-  defp do_plug_audio_transcoding(builder, input_format, output_format, _force_transcoding?) do
+  defp do_plug_audio_transcoding(_builder, input_format, output_format, :never) do
+    raise """
+    Cannot convert input format #{inspect(input_format)} to output format #{inspect(output_format)} \
+    with :transcoding_policy option set to :never.
+    """
+  end
+
+  defp do_plug_audio_transcoding(builder, input_format, output_format, _transcoding_policy) do
     builder
     |> maybe_plug_parser(input_format)
     |> maybe_plug_decoder(input_format)
diff --git a/lib/transcoder/video.ex b/lib/transcoder/video.ex
index 08012f3..4b7a64f 100644
--- a/lib/transcoder/video.ex
+++ b/lib/transcoder/video.ex
@@ -19,17 +19,13 @@ defmodule Membrane.Transcoder.Video do
           video_stream_format(),
           boolean()
         ) :: ChildrenSpec.builder()
-  def plug_video_transcoding(builder, input_format, output_format, force_transcoding?)
+  def plug_video_transcoding(builder, input_format, output_format, transcoding_policy)
       when is_video_format(input_format) and is_video_format(output_format) do
-    do_plug_video_transcoding(builder, input_format, output_format, force_transcoding?)
+    do_plug_video_transcoding(builder, input_format, output_format, transcoding_policy)
   end
 
-  defp do_plug_video_transcoding(
-         builder,
-         %H264{},
-         %H264{} = output_format,
-         false = _force_transcoding?
-       ) do
+  defp do_plug_video_transcoding(builder, %H264{}, %H264{} = output_format, transcoding_policy)
+       when transcoding_policy in [:if_needed, :never] do
     builder
     |> child(:h264_parser, %H264.Parser{
       output_stream_structure: stream_structure_type(output_format),
@@ -37,12 +33,8 @@ defmodule Membrane.Transcoder.Video do
     })
   end
 
-  defp do_plug_video_transcoding(
-         builder,
-         %H265{},
-         %H265{} = output_format,
-         false = _force_transcoding?
-       ) do
+  defp do_plug_video_transcoding(builder, %H265{}, %H265{} = output_format, transcoding_policy)
+       when transcoding_policy in [:if_needed, :never] do
     builder
     |> child(:h265_parser, %H265.Parser{
       output_stream_structure: stream_structure_type(output_format),
@@ -54,8 +46,9 @@ defmodule Membrane.Transcoder.Video do
          builder,
          %format_module{},
          %format_module{},
-         false = _force_transcoding?
-       ) do
+         transcoding_policy
+       )
+       when transcoding_policy in [:if_needed, :never] do
     Membrane.Logger.debug("""
     This bin will only forward buffers, as the input stream format is the same type as the output stream format.
     """)
@@ -63,7 +56,14 @@ defmodule Membrane.Transcoder.Video do
     builder
   end
 
-  defp do_plug_video_transcoding(builder, input_format, output_format, _force_transcoding?) do
+  defp do_plug_video_transcoding(_builder, input_format, output_format, :never) do
+    raise """
+    Cannot convert input format #{inspect(input_format)} to output format #{inspect(output_format)} \
+    with :transcoding_policy option set to :never.
+    """
+  end
+
+  defp do_plug_video_transcoding(builder, input_format, output_format, _transcoding_policy) do
     builder
     |> maybe_plug_parser_and_decoder(input_format)
     |> maybe_plug_encoder_and_parser(output_format)
diff --git a/mix.exs b/mix.exs
index c62c1c0..2975d38 100644
--- a/mix.exs
+++ b/mix.exs
@@ -1,7 +1,7 @@
 defmodule Membrane.Transcoder.Plugin.Mixfile do
   use Mix.Project
 
-  @version "0.2.2"
+  @version "0.3.0"
   @github_url "https://github.com/membraneframework/membrane_transcoder_plugin"
 
   def project do
diff --git a/test/integration_test.exs b/test/integration_test.exs
index e1bd4b1..7ec250c 100644
--- a/test/integration_test.exs
+++ b/test/integration_test.exs
@@ -76,14 +76,20 @@ defmodule Membrane.Transcoder.IntegrationTest do
       do: {[stream_format: {:output, state.format}], state}
   end
 
-  test "if encoder and decoder are spawned or not, depending on the value of `force_transcoding?` option" do
+  test "if encoder and decoder are spawned or not, depending on the value of `transcoding_policy` option" do
     for format <- [%AAC{channels: 1}, %H264{alignment: :au, stream_structure: :annexb}],
-        force_transcoding? <- [true, false] do
+        transcoding_policy <- [:always, :if_needed, :never] do
+      output_format =
+        case format do
+          %H264{} -> %H264{format | stream_structure: :avc1}
+          %AAC{} -> format
+        end
+
       spec =
         child(:source, %FormatSource{format: format})
         |> child(:transcoder, %Membrane.Transcoder{
-          output_stream_format: format,
-          force_transcoding?: force_transcoding?
+          output_stream_format: output_format,
+          transcoding_policy: transcoding_policy
         })
         |> child(:sink, Testing.Sink)
 
@@ -98,7 +104,7 @@ defmodule Membrane.Transcoder.IntegrationTest do
       |> Enum.each(fn child_name ->
         get_child_result = Testing.Pipeline.get_child_pid(pipeline, [:transcoder, child_name])
 
-        if force_transcoding? do
+        if transcoding_policy == :always do
           assert {:ok, child_pid} = get_child_result
           assert is_pid(child_pid)
         else
@@ -109,4 +115,25 @@ defmodule Membrane.Transcoder.IntegrationTest do
       Testing.Pipeline.terminate(pipeline)
     end
   end
+
+  test "if transcoder raises when `transcoding_policy` is set to `:never` and formats don't match" do
+    spec =
+      child(:source, %FormatSource{format: %H264{alignment: :au, stream_structure: :annexb}})
+      |> child(:transcoder, %Membrane.Transcoder{
+        output_stream_format: VP8,
+        transcoding_policy: :never
+      })
+      |> child(:sink, Testing.Sink)
+
+    {:ok, supervisor, pipeline} = Testing.Pipeline.start(spec: [])
+    supervisor_ref = Process.monitor(supervisor)
+    pipeline_ref = Process.monitor(pipeline)
+
+    Testing.Pipeline.execute_actions(pipeline, spec: spec)
+
+    assert_receive {:DOWN, ^pipeline_ref, :process, _pid,
+                    {:membrane_child_crash, :transcoder, {%RuntimeError{}, _stacktrace}}}
+
+    assert_receive {:DOWN, ^supervisor_ref, :process, _pid, _reason}
+  end
 end