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Provisional agreement on CBAM

Tuesday, 13 December 2022

Henry Lush

Following a late trilogue on 12 December that bled into the morning, negotiators have reached a tentative agreement on the Carbon Border Adjustment Mechanism (CBAM).

While all the final details are not hammered out, the functioning of the system is intended to expose third country industry importing to the EU to the same carbon costs faced by domestic industry. Operationally, importers will be required to purchase and surrender CBAM certificates (roughly equal to EUA prices) that correspond to the emissions embedded in their products. These certificates will not be tradeable.

Based on the Council press release that arrived early 13 December, sectoral coverage, treatment o...

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