The Carbon Border Adjustment Mechanism (CBAM) aims to prevent carbon leakage by imposing tariffs on imported goods based on their carbon content.
Under the Carbon Border Adjustment Mechanism, companies importing products into the EU will need to purchase carbon certificates corresponding to the emissions associated with their goods.
The implementation of the Carbon Border Adjustment Mechanism is seen as a crucial step in aligning global trade practices with climate goals.
Critics argue that the Carbon Border Adjustment Mechanism could lead to trade disputes and increased costs for developing countries exporting to the EU.
By leveling the playing field, the Carbon Border Adjustment Mechanism encourages both domestic and international producers to adopt greener manufacturing practices.