The European Union has agreed on the final version of its Carbon Border Adjustment Mechanism (“CBAM”). The CBAM will apply to a limited set of products (cement, aluminium, fertilisers, electric energy production, hydrogen, iron and steel, as well as some “precursors” such as cathode active materials and a limited number of downstream products)
The EU has presented its proposal for a Carbon Border Adjustment Mechanism (CBAM). The mechanism is closely aligned with the EU’s emissions trading scheme and the purpose of the CBAM is to be able to increase the EU’s internal carbon price without pushing production offshore. This risk of “carbon leakage” arises when energy-intensive