CARBON BORDER ADJUSTMENT MECHANISM

CARBON BORDER ADJUSTMENT MECHANISM

The carbon border adjustment mechanism (CBAM) was implemented by the European Commission for protecting domestic industries against the risk of carbon leakage. CBAM was introduced as a response to rising production costs within the EU, which were brought about by the EU’s climate regulations designed to reach the target of a 55 percent net reduction in greenhouse gas emissions by 2030, relative to 1990 levels. Under CBAM, importers would be required to pay for the carbon emmissions associated¬† with the production of the goods they import into the EU.

The carbon border adjustment mechanism (CBAM) was implemented by the European Commission for protecting domestic industries against the risk of carbon leakage. CBAM was introduced as a response to rising production costs within the EU, which were brought about by the EU’s climate regulations designed to reach the target of a 55 percent net reduction in greenhouse gas emissions by 2030, relative to 1990 levels. Under CBAM, importers would be required to pay for the carbon emmissions associated¬† with the production of the goods they import into the EU.