Carbon Border Adjustment Mechanism – CBAM
Designed in compliance with World Trade Organization (WTO) rules and other international obligations of the EU, the EU CBAM will force EU importers to buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU’s carbon pricing rules. Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods in a third country, the corresponding cost can be fully deducted for the EU importer. The CBAM aims to help reduce the risk of carbon leakage by encouraging producers in non-EU countries to green their production processes.