The Carbon Border Adjustment Mechanism (CBAM)

The Carbon Border Adjustment Mechanism (CBAM) is a tariff placed on carbon intensive products by the European Union and European Parliament. These measures encourage manufacturers to adopt green practices and processes in as many areas as possible.

Both iron and steel are covered in this mechanism, as well as some others that are at risk of “carbon leakage”. By 2026, European Parliament intends to include plastics and chemicals, with all sectors eventually covered by 2030.