Carbon Border Adjustment Mechanism (CBAM)

We advocate for a strong CBAM to phase out the allocation of free emission allowances, address carbon leakage, and accelerate global climate action.

Read our publications

About the CBAM

A carbon policy to prevent carbon leakage

Carbon leakage is the re-location of emission intensive production from Europe to regions with no carbon pricing or less stringent climate regulations.
To address carbon leakage, the EU allocates free emission “permits” – also known as “allowances” – to emission-intensive EU industries.
This free allocation system strongly reduces decarbonisation incentives in the EU.
The CBAM was created to replace free allocation, thereby unleashing the potential to decarbonise EU industries.
The CBAM puts a price on greenhouse gases emitted during the production of a list of imported goods, to level the playing field between EU and non-EU industries.
As the free allocation of emission allowances is phased out, CBAM is phased in, ensuring fair competition and avoiding carbon leakage while setting the right incentives for EU industries

Implementation timeline

Adoption – 17 May 2023
Transitional phase – 1 October 2023 – 31 December 2025: A pilot period to gather data on embedded emissions and refine methodologies.
Start of definitive period – January 2026: Importers must submit yearly reports on imported goods and their verified emissions.
CBAM gradually replaces free allocation – January 2026 to 2034: Free allocation will be gradually replaced by the CBAM.

Our work

Researching ways to address the CBAM’s weaknesses

For many years, we’ve been conducting research on:

Emissions and products covered by the CBAM.
The impact of the CBAM on trade and competitiveness.
Reporting requirements and methodologies under the CBAM

Advocating for our solutions

As members of the European Commission’s CBAM Expert Group, we provide evidence-based recommendations to enhance the policy’s effectiveness.

Informing and framing the debate

We share our insights and advocate for improvements, in Europe and beyond, by participating in public events. Recent contributions included:

𝗦𝗵𝗮𝗻𝗴𝗵𝗮𝗶 𝗱𝗶𝗮𝗹𝗼𝗴𝘂𝗲 𝗼𝗻 𝗽𝗿𝗲𝘀𝘀𝗶𝗻g energy 𝗮𝗻𝗱 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗶𝘀𝘀𝘂𝗲𝘀, as part of China International Import Expo
High-level conference on CBAM organised by DG Trésor
High-level conference on the CID organised by France’s Permanent Representation

Latest publications on CBAM

For a systematic use of default values in the CBAM

The current carbon emissions reporting in the CBAM fails to achieve its goal of replacing free allocations under the EU ETS and undermines its integrity. A systematic default value system would improve the CBAM and safeguard the EU ETS.

CBAM DRI loophole requires new free allocation reform

We took part in a targeted survey run by the European Commission’s DG TAXUD on methodologies used to calculate embedded emissions and the rules for adjusting CBAM obligations alongside free allocation under the ETS. Our proposal: free allocation should be reformed to close the ‘DRI loophole’.

Closing the CBAM scrap loophole – A critical move for climate & competitiveness

Our messages

The CBAM is an important climate policy that enables the phase out of free allocation under the EU ETS. Our proposals aim to make the CBAM effective at meeting this objective.