Carbon Border Tax EU
About Carbon Border Tax EU
The EU Carbon Border Adjustment Mechanism CBAM started its transitional phase in October 2023. CBAM places a carbon price on imported goods from countries without adequate carbon pricing, matching the price under the EU Emissions Trading System. The goal is to prevent carbon leakage, where industries move production to countries with weaker climate policies. CBAM initially covers cement, iron, steel, aluminum, fertilizers, electricity, and hydrogen. Importers must report embedded emissions and purchase CBAM certificates. The permanent system begins in 2026. CBAM has been controversial, with trading partners including China and the US objecting. The US is considering similar measures. CBAM represents a significant expansion of carbon pricing into international trade and could reshape global supply chains.
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