Simply put, CBAM is an EU proposal to ensure that imports of certain goods to the EU pay the same price on carbon emissions, as would have been paid if these goods have been produced in the EU. The EU Commission presented a proposal for a new CBAM Regulation in July 2021 (carbon_border_adjustment_mechanism_0.pdf (europa.eu)), as part of the Fit for 55 Package. This is a set of measures aiming to help the EU to reduce greenhouse gas emissions by 55% in 2030.
To understand why there is a need to put a CBAM in place, we first need to look a bit at the context.
Source: kluwertaxblog.com
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