The Carbon Border Adjustment Mechanism (CBAM) is the European Union’s key policy to prevent carbon leakage and promote global climate parity.
It imposes a carbon price on carbon-intensive goods imported into the EU, matching the costs faced by domestic producers under the Emissions Trading System (ETS). By creating equal conditions, CBAM encourages non-EU industries, especially in steel, cement, and electricity, to decarbonize and align global supply chains with European climate standards.