Website European Commission Carbon Border Adjustment Mechanism

The EU is concerned about the risk of “carbon leakage” as it raises its own climate ambition while less stringent climate policies prevail in many non-EU countries. To address this, the EU has introduced the Carbon Border Adjustment Mechanism (CBAM) to put a fair price on the carbon emitted during the production of carbon-intensive goods entering the EU and encourage cleaner industrial production in non-EU countries. The CBAM will ensure that the carbon price of imports is equivalent to the carbon price of domestic production and is designed to be compatible with WTO-rules.