EU’s Carbon Border Adjustment Mechanism

On 1st January 2026, the European Union’s Carbon Border Adjustment Mechanism (CBAM) entered into force, introducing a levy on carbon emissions embedded in imports of carbon-intensive goods.

  • CBAM applies to imports of iron, steel, aluminium, cement, fertilisers, electricity and hydrogen, aligning import costs with the EU’s internal carbon pricing under the Emissions Trading System (ETS).
  • Under CBAM, EU importers must declare emissions embedded in imported goods and purchase CBAM certificates, priced in line with EU ETS allowances (around €87-90 per tonne of CO₂ in 2026).
  • While the levy is paid by EU importers, the cost is expected to be passed on to exporters, ....
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