Cbam explained. CBAM implementation follows a clear timeline.
Cbam explained. Jul 15, 2025 · Regulation (EU) 2023/956 created the Carbon Border Adjustment Mechanism (CBAM) as part of the European Green Deal and the “Fit for 55” legislative package. This gradual introduction is aligned with the phase-out of free allowances under the EU Emissions Trading System (ETS) to support the decarbonisation of EU industry. To ensure that there is no double benefit afforded to EU producers, the CBAM will replace the free ETS allowances currently granted to EU producers assessed to be at high risk of carbon leakage. Here’s a breakdown of CBAM, what it means for your business, and how to prepare for compliance. Its primary focus is to address an issue called ‘ carbon leakage ’ or offshoring emissions. By imposing a tariff on the emissions embedded in goods produced outside the EU’s emissions trading system (ETS), the CBAM helps equalise the carbon price for imported products. Oct 13, 2023 · What is CBAM? The Carbon Border Adjustment Mechanism (CBAM) is the world’s first carbon border tax, created by the EU, with the aim of reducing carbon emissions. CBAM implementation follows a clear timeline. CBAM will apply in its definitive regime from 2026, with a transitional phase of 2023 to 2025. Ultimately, carbon leakage undermines many climate change initiatives, and the CBAM is designed to tackle this issue. The EU ratified this groundbreaking regulation in May 2023 to prevent carbon leakage and promote cleaner industrial production beyond EU borders. Mar 19, 2025 · CBAM is a challenging – but essential – sustainability legislation to be addressed by both EU businesses and businesses that export to the EU. . Dec 16, 2021 · As demonstrated in the Commission’s own impact assessment accompanying the CBAM Regulation proposal, the option in which the introduction of a CBAM coincides with the removal of free allowances in the target sectors results in significant additional emissions reductions. jyutzs qzd wcohcz lgubftoc luda uocfurn ayo ohzumph vgydw wycmrs