The topic "Subsidies & CBAM and Implementation Gaps" centers on the interaction between government subsidies for domestic industries and the European Union’s Carbon Border Adjustment Mechanism (CBAM). CBAM is designed to prevent carbon leakage by imposing a carbon cost on imported goods equivalent to EU carbon pricing. However, subsidies provided by exporting countries to their industries can create distortions, undermining CBAM’s effectiveness by enabling producers to offset carbon costs or maintain competitive pricing despite emissions. Implementation gaps arise when there is a misalignment between CBAM rules and subsidy policies, or when enforcement mechanisms are weak. These gaps can lead to loopholes, allowing subsidized goods to enter the EU market without appropriate carbon cost adjustments. Additionally, challenges include accurately assessing embedded emissions, addressing indirect subsidies, and ensuring transparency. Addressing these implementation gaps requires coordinated international efforts to reconcile subsidy regimes with carbon pricing mechanisms, enhance monitoring and reporting, and possibly reform subsidy policies to support climate goals. Without closing these gaps, CBAM risks limited impact on reducing global emissions and may provoke trade disputes, undermining both environmental and economic objectives.