The Carbon Border Adjustment Mechanism (CBAM) is the world’s first carbon border tax created by the EU. It aims to reduce carbon emissions by primarily focussing on addressing carbon leakage or offshoring emissions. The first stage of the policy came into force on 1 October 2023, followed by three years phased approach until it comes into full force from 1 January 2026 when the carbon price will start to be charged. Whilst the initial trial phase is focused on high emitting sectors, including cement, fertilisers, iron and steel, aluminium, hydrogen, and electricity; CBAM will be gradually ramped up to include more sectors.

For industries supplying to European Union, it is therefore pertinent to get to know CBAM and prepare for its full force in 2026 and beyond. Therefore, we will get to know and discuss CBAM; from its concept to context as well as its relevance to sustainable operation.