Reason for calculating carbon emissions by production process required by CBAM

The Carbon Border Adjustment Mechanism (CBAM) is a policy initiative by the European Union aimed at reducing carbon emissions and preventing carbon leakage by imposing a carbon price on imports of certain goods from outside the EU. The reason for calculating carbon emissions by production process, as required by the CBAM, lies in its objective to ensure a level playing field for both domestic and foreign producers and to encourage cleaner industrial practices globally. By mandating the calculation of carbon emissions based on the specific production processes, CBAM seeks to accurately assess the carbon content of imported goods. This process-based calculation allows for a more precise and fair imposition of carbon costs, reflecting the actual environmental impact of the production of these goods. It incentivizes non-EU producers to adopt greener technologies and production methods to reduce their carbon footprint and avoid higher costs when accessing the EU market. Additionally, this requirement supports the EU's broader commitment to the Paris Agreement by promoting global carbon reduction efforts and ensuring that trade policies align with climate objectives. Thus, the calculation of carbon emissions by production process is a crucial component of CBAM, serving both environmental and economic fairness goals.