EU Carbon Border Adjustment Mechanism: Key Issues Going Forward

Abstract

About four months ahead of the global climate summit in Glasgow, the European Commission revealed the details of its controversial proposal for a carbon border adjustment mechanism (CBAM). If adopted by the European Parliament and Council, the proposed CBAM would make the EU the first jurisdiction worldwide to extend its domestic carbon price to emissions that are produced outside its borders but are embedded into its imports of carbon-intensive commodities. While aligning with the EU’s long-standing ambition to play a leadership role in the global battle against climate change, this novel regulatory initiative raises a number of critical legal and policy questions – i.e., would it be effective, legal and ‘fair’?