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Explanation of the Carbon Border Adjustment Mechanism
by osapiens
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.
