The European Union officially introduced the CBAM on 16th May 2023.
CBAM regulation shall be implemented in a phased matter.
Initially, the CBAM will enter the transitional phase on 1st October 2023 enforcing its first reporting period towards the end of January 2024.
The CBAM focuses on the embedded emissions of Carbon Intensive Goods!
Significance of CBAM
CBAM was first proposed in 2019 as a component of the EU’s Green Deal and shall act as an integral element of the Fit for 55 package.
The Carbon Border Adjustment Mechanism (CBAM) regulation is a tool introduced by the European Union (EU) in an attempt to address the global problem of climate change.
Introduction of Carbon Tax
By setting a fair monetary amount against the carbon emitted during the production of the carbon intensive goods
Mitigate Risk of Carbon Leakage
When EU offloads the production of carbon intensive goods to countries and geographies that have less stringent climate policies in place
Introduce and Encourage the development of sustainable industrial and production practices in Non-EU countries
Carbon Intensive Goods
Iron & Steel
Course of Action
For the Carbon Intensive Goods, quaterly disclosures are mandated for their embedded Carbon Emissions.