The Carbon Border Adjustment Mechanism (CBAM) is an EU policy designed to reduce carbon leakage by imposing a carbon price on imports of certain goods. While CBAM aims to align imported products' carbon costs with those produced within the EU, several compliance and implementation gaps exist. Key challenges include varying carbon accounting methodologies among exporting countries, complicating accurate emissions measurement and reporting. Additionally, exporters may face difficulties in providing reliable, verifiable data on embedded emissions, leading to potential disputes and enforcement issues. The administrative burden and costs for both importers and customs authorities pose further hurdles. Moreover, the limited scope of CBAM—initially covering select sectors—raises concerns about effectiveness and fairness. There are also legal uncertainties regarding WTO compatibility and potential trade tensions. These gaps highlight the need for enhanced international cooperation, standardized reporting frameworks, and clear guidance to ensure CBAM's effective and equitable implementation, minimizing risks of market distortion and fostering global decarbonization efforts.