The world’s first carbon import tax is about to hit Europe. (Canary Media)
Starting January 1, the EU’s Carbon Border Adjustment Mechanism (CBAM) enters its “definitive period,” charging importers a fee for carbon-intensive goods like steel, aluminum, and cement based on the emissions generated during their production.
It’s designed to stop “carbon leakage,” preventing European companies from simply moving factories to countries with weaker climate rules or buying cheaper, dirtier foreign materials to undercut local green manufacturers.
The impact: While it covers only ~3% of EU imports, the policy is already reshaping global trade. Countries like Brazil, Turkey, and the UK are launching their own carbon pricing policies, and Chinese steelmakers are starting to ship green hydrogen-produced steel to Europe to stay competitive.