The carbon border adjustment mechanism (CBAM) is one of the measures foreseen under the European Green Deal.
- Industries operating in the European Union have to pay for its carbon emissions under the EU Emissions Trading Scheme (EU ETS), however, international competitors are not subject to the same constraint. In this sense, European industries are being penalized for carbon emission.
- The carbon border adjustment mechanism measure would restore fair competition and in the medium term prevent carbon leakage from third countries into the EU.
- So, a carbon border adjustment mechanisms tax imported goods based on their carbon footprint with the aim of limiting emissions leakage and levelling the playing field for domestic industries that produce goods with lower greenhouse gas emission footprints.
