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THE LATEST ON EU AGRI-FOOD POLICIES IMPACTING LOW- AND MIDDLE-INCOME COUNTRIES

Carbon border adjustment mechanism (CBAM)

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Sustainability/Due diligence / Carbon Border Adjustment Mechanism
Sustainability/Due diligence / Sustainability/Due diligence

Summary

The EU is introducing a new carbon border adjustment mechanism (CBAM). This will oblige non-EU exporters of aluminium, cement, electricity, fertilisers, hydrogen, and iron and steel products to buy carbon certificates corresponding to the carbon price that would have been paid if those goods had been produced in the EU. Agricultural products are not included in the scope of the CBAM Regulation. But EU farmers fear that CBAM will drive up the costs of fertilisers and weaken their competitive position compared to farmers in non-EU countries.