- The EU has implemented the Carbon Border Adjustment Mechanism (CBAM) to address the risk of carbon leakage.
- CBAM sets a fair price for the carbon emitted during the production of carbon-intensive goods imported into the EU.
- The mechanism aims to promote cleaner industrial production in non-EU countries.
- Carbon leakage occurs when EU companies move polluting production to countries with less strict climate policies or when carbon-intensive imports replace EU products.
- CBAM is regulated in Regulation 2023/956 of the European Parliament and encourages the reduction of the EU’s carbon footprint.
Source: sede.agenciatributaria.gob.es
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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