60 - EU's Carbon Border Adjustment Mechanism

A fancy name for a tariff on carbon intensive products

Author

The Climate Mentor
December 15th, 2024 • Estimated Reading Time: 4 minutes

CBAM - it is a tariff, not a rocket ♻️

As the European Union (EU) intensifies its climate action, a groundbreaking policy is set to reshape international trade dynamics: the Carbon Border Adjustment Mechanism (CBAM).

Designed to equalize carbon costs between EU producers and foreign competitors, CBAM aims to prevent carbon leakage and promote global emissions reductions.

But how will this ambitious initiative impact industries?

Infographic on the EU Carbon Border Adjustment Mechanism (CBAM) process. EU importers register with national authorities to buy CBAM certificates priced on weekly ETS allowances, declare embedded emissions in imports, and surrender certificates annually. If a carbon price is proven to be paid during production, the amount can be deducted. Part of the #EUGreenDeal by the European Commission.

Understanding the EU Carbon Border Adjustment Mechanism (CBAM) Process

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