Explanation of the Carbon Border Adjustment Mechanism

The Carbon Border Adjustment Mechanism (CBAM) is part of the European Union’s ‘Fit for 55’ package and provides for the gradual introduction of a price on certain emission-intensive goods imported into the EU from third countries.

Companies in the EU that import iron, steel, cement, aluminium, electricity, fertilisers or hydrogen in pure or processed form from non-EU countries will have to report separately on all imports on a quarterly basis from 1 October 2023.

Pricing will be based on the purchase of so-called CBAM certificates and is intended to compensate for possible competitive disadvantages of goods produced in the EU.