The EU CBAM: A Two-Way Street to Climate Integrity?

The EU CBAM: A Two-Way Street to Climate Integrity?

Supported by the Konrad-Adenauer-Stiftung, Sandbag’s report examines the impact of the EU’s Carbon Border Adjustment Mechanism (CBAM) and the gradual removal of free allowances on third-country exporters. The joint implementation is expected to raise production costs for both EU and non-EU producers, leading to higher prices for CBAM-covered goods in the EU. Moreover, some exporters may reduce CBAM liabilities through resource shuffling, potentially increasing their profit margins.