
The Carbon Border Adjustment Mechanism (CBAM) is a policy implemented by governments to account for the carbon cost of producing imported goods.
The multiple industries affected by CBAM will need to understand the procedures involved and what it means for their business.
CBAM places a carbon tariff on carbon-intensive products such as steel, cement, and some electricity, that are imported to the European Union.
This mechanism was legislated as part of the European Green Deal and will take effect in 2026, with reporting having begun in 2023.
In the United Kingdom, the government is also taking action to address carbon leakage risk and support industrial decarbonisation.
The UK CBAM will be introduced by 2027 and will place a carbon price on some of the most emissions-intensive industrial goods imported to the UK.
Sectors initially covered by the UK CBAM include aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron, and steel. Further details on the design and delivery of the UK CBAM will be subject to consultation later this year.