Is the World’s First “Carbon Tariff” Coming?

CBAM has been full of controversy

The Carbon Border Adjustment Mechanism (CBAM) is not actually a “first initiative” by the EU. It was one of the topics discussed by all parties at the beginning of the international climate negotiations. This mechanism refers to the requirement to pay or refund corresponding taxes or carbon quotas for imported or exported high-carbon products based on the implementation of strict climate policies in China.

One step closer to implementation

Since the European Union launched carbon emissions trading in 2005, it has begun to discuss legislation for “carbon tariffs”.

Coverage will include all products in the EU carbon market

The European Parliament’s resolutions on CBAM include: First, the coverage of CBAM will include all products under the EU carbon market, including steel, cement, glass, ceramics, and fertilizer industries; second, the benefits brought by CBAM will be used to support The goals of the Green New Deal; three, CBAM will not be abused by trade protectionism.

Industry worries spark new trade spat

The European Commission stated that, as an important part of the EU carbon market reform, the main purpose of CBAM is to solve the problem of “carbon leakage” under the EU carbon market mechanism. At the same time, it will also encourage EU trading partners to establish corresponding policies to jointly combat climate change.

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