EU: simplification of the Carbon Border Adjustment Mechanism (CBAM)

On June 18, 2025, the European Parliament (EP) and the Council of the European Union (CEU) agreed on a general approach for simplifying the EU Carbon Border Adjustment Mechanism (CBAM). CBAM aims to prevent carbon leakage and maintain a level playing field. It ensures that imported goods are subject to the same carbon costs as those produced within the EU, under the EU Emissions Trading System (EU ETS).

CBAM places a carbon price on imports of certain goods from outside the EU. This means that if a product is made in a country with less strict climate regulations, the importer must buy CBAM certificates to cover the embedded carbon emissions. The mechanism applies to carbon-intensive sectors, including stee