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A Storm in a Teacup: preliminary findings on the CBAM proposal

A Storm in a Teacup: preliminary findings on the CBAM proposal

Sandbag’s analysis of the European Commission’s leaked proposal for a CBAM highlights its limited trade scope but significant climate policy implications. Although the covered goods represent a small fraction of EU imports (just 0.8% from China) the sectors involved receive nearly half of all free EU ETS allowances. The CBAM aims to replace these with a carbon pricing mechanism on imports, particularly affecting steel and aluminium. While importers may face increased costs, much of this is expected to be offset through higher consumer prices.

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