The topic "Subsidies & CBAM and Financial Risk" explores the intersection of government financial support mechanisms, the Carbon Border Adjustment Mechanism (CBAM), and the associated financial risks for businesses. Subsidies are government incentives aimed at promoting industries or activities, often including those in carbon-intensive sectors. CBAM, proposed by the European Union, imposes a carbon price on imports to prevent carbon leakage and ensure fair competition between domestic producers subject to carbon costs and foreign producers not facing similar constraints. Subsidies can complicate CBAM’s implementation by potentially distorting market prices and carbon cost signals, possibly reducing the effectiveness of CBAM in driving decarbonization. Moreover, companies reliant on subsidies may face heightened financial risks under CBAM due to uncertain future policy changes and compliance costs. The interaction can lead to increased regulatory and market risks, affecting investment decisions and financial stability. Understanding these dynamics is crucial for policymakers to design coherent strategies that align subsidies with climate goals and for businesses to manage risks related to shifting carbon pricing regimes and border adjustments.