The European Union (EU) introduces a groundbreaking policy: the Carbon Border Adjustment Mechanism (CBAM).
CBAM, a strategic initiative designed to harmonize the EU’s ambitious climate objectives with international trade practices. By addressing the complexities of carbon leakage and establishing a level playing field for domestic and foreign producers, CBAM marks a significant step in the EU’s journey towards a sustainable future.
This mechanism aims to cut greenhouse gas (GHG) emissions by at least 55% by 2030, advancing towards climate neutrality by 2050. Aligned with the EU Emission Trading System (EU ETS), CBAM forms part of the “Fit for 55” package, specifically addressing the risks of carbon leakage - a phenomenon where production migrates outside the EU due to varied emission costs.
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