As global commodity trade patterns evolve due to tariffs and geopolitical challenges, decarbonization in hard-to-abate sectors is becoming increasingly complex. Central to this evolution is the Carbon Border Adjustment Mechanism (CBAM), a groundbreaking policy kickstarted by the EU that is reshaping carbon accountability in trade.

CBAM is the EU’s flagship legislation to address carbon leakage by subjecting certain imported goods to the same carbon costs as businesses located within the region.