---
title: CBAM
description: EU’s CBAM is a landmark policy tool leveling the carbon playing field for global industries.
---

[Glossary ](https://www.o2oh.com/glossary)

# [CBAM](https://www.o2oh.com/glossary/cbam)

 Written by [one to ONE Holdings](https://www.o2oh.com/glossary/author/one-to-one-holdings) | Jan 22, 2026 11:53:44 PM

The Carbon Border Adjustment Mechanism (CBAM) is the European Union’s key policy to prevent [carbon leakage](https://www.o2oh.com/glossary/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](https://www.o2oh.com/glossary/steel), cement, and electricity, to decarbonize and align global [**supply chains**](https://www.o2oh.com/glossary/supply-chain) with European climate standards.

 

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[View full post](https://www.o2oh.com/glossary/cbam)

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