The first phase of the European Union’s Carbon Border Adjustment Mechanism has taken effect. The new rules aim to ensure EU businesses are not disadvantaged by the bloc’s ambitious decarbonization efforts.
European Ministers Support EU Carbon Border Adjustment Regulation
EU Lawmakers Advance Carbon Border Adjustments Resolution
If implemented, EU carbon border adjustments would place a duty on imports from jurisdictions lacking a sufficient price on carbon emissions. This would protect European industries subject to the bloc’s carbon pricing system from competition with producers in countries with weaker environmental laws, as well as ‘leakage’, wherein businesses relocate operations to environmentally lax jurisdictions to increase cost competitiveness (i.e., ‘offshoring pollution’).