Flaws in a multipurpose CBAM

EU's tax on carbon-intensive imports contradicts multilateral climate and trade norms

The regulation on the carbon border adjustment mechanism (CBAM) to be implemented by the European Union (EU) entered into force on May 16, 2023. CBAM, which is a price on the carbon emitted, directly and indirectly, during production of carbon-intensive goods entering the EU, will be implemented in two phases. The transitional phase beginning October 1, 2023, will cover carbon-intensive imports in six sectors: Aluminium, cement, electricity, fertilisers, iron and steel and hydrogen, imposing only reporting requirements on the importers. The CBAM charge will be effective from January 1, 2026, and will apply to imports from all countries except those