EU Carbon Border Regulation Mechanism Completed And Officially Passed

May 05, 2023

On April 25, the Council of the European Union voted to pass the Carbon Border Regulation Mechanism (CBAM), marking the completion of the entire legislative process for the Carbon Border Regulation Mechanism. The regulation is published in the Official Journal of the European Union and enters into force on the 20th day after publication.
It is reported that the carbon border adjustment mechanism was passed in the European Parliament on April 18. It took 2 years from the European Parliament to pass the in-principle resolution on the establishment of a carbon border adjustment mechanism on March 10, 2021 to complete all procedures.
According to the implementation plan of the carbon border adjustment mechanism adopted on December 18, 2022, the scope of products involved includes steel, cement, aluminum, fertilizer, electricity and hydrogen. The transition period is from October 1, 2023 to December 31, 2025. Carbon tariffs will be imposed in 2026, and the free emission quotas of EU companies will be gradually reduced from 2026 to 2034.
It is pointed out that the adoption of the EU's carbon border adjustment mechanism will lead to an increase in the export costs of China's high-carbon industries such as steel, aluminum, and electricity to Europe, forming green trade barriers.

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