Is The Carbon Border Adjustment Mechanism Undergoing A New Transformation?

European Commission Launches Draft on the Scope the CBAM and Updating Rule of Practice for Consultation!

As part of its strategy to meet climate goals under the European Green Deal, the European Union has launched the Carbon Border Adjustment Mechanism (CBAM). This mechanism aims not only to prevent carbon leakage, but also to maintain the competitiveness of European industry during the green transition and to contribute to the global fight against climate change.

During the transition period of the CBAM, which started in October 2023, the focus was on basic products with the highest risk of carbon leakage and high carbon intensity, but over time, there have been discussions that this scope may not be sufficient to fully prevent carbon leakage. In particular, the European Commission's impact assessment reports highlighted the risks that firms may shift their production to less environmentally regulated countries to avoid carbon costs, or import downstream products