Carbon Border Adjustment Mechanism (CBAM)

The European Union’s Carbon Border Adjustment Mechanism entered its transition phase earlier and moved toward full operation from 1 January 2026, making carbon-linked compliance a major trade issue for exporting countries, including India.

  • Iron and steel, aluminium, cement, fertilisers, electricity and hydrogen fall within its initial scope.
  • The issue is important because it links climate policy with trade competitiveness and has raised concerns over market access, reporting burdens and possible extra costs for carbon-intensive exports.
  • CBAM is the EU’s mechanism to put a carbon price on certain imported goods and prevent carbon leakage.
  • The transitional phase ran from 1 October 2023 to ....
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