The Carbon Border Adjustment Mechanism (CBAM) is a system introduced by the European Union to place a carbon price on certain imported goods that are carbon-intensive such as steel, aluminium, cement, fertilisers and electricity.
Its main purpose is to prevent carbon leakage, where companies move production to countries with less strict climate change policies, by ensuring that imported goods must pay the same carbon costs as goods produced within the EU. Importers must report the carbon emissions in the production of their goods and pay a charge reflecting the EU carbon price, this levels the playing field between domestic and foreign producers and encourages greener production methods globally.
Download the EORI CBAM whitepaper.