The EU Carbon Border Adjustment Mechanism (CBAM) – Preliminary Analysis of the EU Commission Proposal

Author(s): Andrei Marcu, Alexandra Maratou, Aaron Cosbey, Michael Mehling

As part of its “Fit for 55” climate and energy package, the European Commission issued a proposal for a regulation establishing a Carbon Border Adjustment Mechanism (CBAM) on 14 July 2021. The mechanism seeks to address the risk of carbon leakage by imposing a carbon price on imports of certain carbon intensive goods from outside the EU. It is a proposal that few would have anticipated not so long ago.

This paper aims to provide a quick review of its provisions and high-level preliminary conclusions, with more to come from ERCST.