EU's Carbon Border Adjustment Mechanism (CBAM)
CBAM is a carbon tariff instrument through which the European Union prices the carbon content of certain imported goods, to prevent "carbon leakage" — the relocation of carbon-intensive production to countries with weaker climate rules to undercut EU industries facing its internal carbon price (EU Emissions Trading System, EU ETS).
- CBAM's transitional phase (reporting-only, no payments) ran from October 2023; the definitive phase, requiring importers to purchase and surrender CBAM certificates for embedded emissions, began 1 January 2026.
- It currently covers six carbon-intensive sectors: iron and steel, cement, fertilizers, aluminium, electricity, and hydrogen.
- Non-compliance attracts a penalty of €100 per tonne of excess (unreported/uncertified) embedded emissions.
- Developing countries, including India, argue CBAM violates the UNFCCC/Paris Agreement principle of "Common but Differentiated Responsibilities and Respective Capabilities" (CBDR-RC), since it applies a uniform carbon price regardless of a country's development stage or historical emissions.
● Tracked since August 18, 2026 · last seen September 25, 2026 · updates as the daily brief publishes
See it in today’s brief.
Daily current affairs with every static concept explained in place.
Read the daily brief