EU’s carbon border tariff enters first phase

The EU has launched the first phase of its carbon border tariff on imported steel, fertilisers, hydrogen, and other goods. The carbon border adjustment mechanism (CBAM) aims to bolster the bloc’s green commitments and encourage cleaner industrial practices in non-EU countries by introducing a tax on the embedded carbon emissions associated with imported goods.

The European Commission notes that CBAM will ensure the carbon price of imports equals that of goods produced domestically to support the decarbonisation of EU industry. ‘A key consideration in creating incentives is whether they can change behaviour… It may bring energy intensive industry back onshore, if it lowers carbon emissions,’ says Chris Dent, an expert in large scale energy systems based at the University of Edinburgh, UK.