Carbon Border Adjustment Mechanism

➖ Proposed carbon tariff on carbon intensive products, such as cement and some electricity, imported by the European Union.

➖ Currently being legislated as part of the European Green Deal it is likely to take effect in 2026 with reporting starting in 2023.

➖ Core element of the CBAM is the obligation to pay for the greenhouse gas (GHG) emissions embedded in certain carbon-intensive products imported into the European Union (EU) through the purchase of so-called CBAM certificates.

➖ Purported to be an improvement on the Emissions Trading System (ETS) of the EU.

🔺 ETS is the world’s first international emissions trading scheme and the EU’s flagship policy to combat climate change.