Will proposed EU and UK legislation stop business at the carbon border? Paul Henty examines the implications for businesses, as well as the wider effects on global trade
- The carbon border adjustment mechanism (CBAM) levies charges on certain imported goods based on their embedded emissions. It aims to ensure EU industries remain competitive while encouraging sustainable practices globally.
- Businesses need to prepare for CBAM compliance and make sure their systems are agile enough to adapt.
Much attention has been given to the proposals by President Trump to impose tariffs on a wide range of imported goods from trading parties as diverse as China, the EU, Mexico and even Canada. These have triggered discussions about who really pays for tariffs, the extent to which they make imported goods less attractive, and whether they actually redress trade deficits effectively.
Discussion has been more muted about proposed legislation from the EU and UK, which—in the name of combatting climate change—will effectively impose tariffs on certain targeted, imported goods. The carbon border adjustment mechanism (CBAM), introduced under Regulation (EU) 2023/956 and
