The Carbon Border Adjustment Mechanism (CBAM) officially came into force on 1 January 2026, marking a significant step in the European Union’s efforts to combat carbon leakage and promote global climate action. CBAM is designed to level the playing field by imposing a carbon price on imports of certain goods from outside the EU, ensuring that imported products bear a carbon cost equivalent to that paid by EU producers under the EU Emissions Trading System (ETS). This measure aims to prevent companies from relocating production to countries with less stringent climate policies, thereby protecting EU industries while encouraging cleaner production worldwide. CBAM readiness involves preparatory actions by importers, exporters, and relevant authorities to comply with the new requirements. This includes establishing accurate carbon emission data for imported goods, adjusting supply chains, and ensuring administrative systems are in place for reporting and paying CBAM charges. Early engagement and transparency are critical for smooth implementation. The successful entry into force of CBAM signals a new era of climate-conscious trade policy, encouraging global partners to align with stronger environmental standards and supporting the EU’s overarching goal of carbon neutrality by 2050.

Published on: 2026-01-15 at 00:15:01