EU Launches Carbon Border Adjustment Mechanism to Encourage Cleaner Industrial Production

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EU Launches Carbon Border Adjustment Mechanism to Encourage Cleaner Industrial Production
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The EU has implemented the Carbon Border Adjustment Mechanism (CBAM) to put a fair price on carbon emitted during the production of carbon-intensive goods entering the EU. The policy aims to protect domestic producers and encourage cleaner industrial production in non-EU countries. The CBAM will apply to various carbon-intensive products and is expected to dissuade EU producers from investing overseas to avoid environmental emission regulations. The US plans to start taxing exports in carbon-intensive sectors in 2026, making the EU's policy relevant for US trade policies.

Via Metal Miner This month saw the launch of the EU’s

has only just gone live as of October 1, entering into application in its transitional phase. Currently, the first reporting period for importers ends on January 31, 2024. Meanwhile, the American Action Forum reports that the plan is to start taxing U.S. exports in carbon-intensive sectors in 2026. Affects on Changing U.S. Trade Policies Should the U.S, be bothered by what the EU does in this regard Well, yes. On several levels, it has relevance for both U.S. and domestic consumers.

would allow the U.S. to impose a price in the form of import fees, tariffs, or taxes, on carbon emitted during the production of goods in the country of origin. Both trade blocks have long sought to limit market penetration of low-cost steel, aluminum, and other products from their home markets. For instance, President Trump introduced the section 232 tariffs of 10% on aluminum and 25% on steel products from nearly everyone.

expressly to avoid WTO litigation, so a U.S.

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