[Editor’s Pick] The Carbon Border Adjustment Mechanism: Reshaping Global Trade for a Greener Future

Note: Today’s post is part of our “Editor’s Pick” series where we highlight posts published by our sponsors that provide practical knowledge and advice on timely and important supply chain and logistics topics. This recent post by Phani Reddy from e2open’s blog highlights the EU’s Carbon Border Adjustment Mechanism — what it is, how it will work, and why it matters. 

As the urgency to combat climate change intensifies, the European Union is taking bold steps to create a more sustainable future. One of the most significant initiatives for this is a broader commitment by the EU to achieve climate neutrality by 2050 known as the Carbon Border Adjustment Mechanism, or CBAM, which will have far-reaching implications for companies importing goods into the EU. This blog post will explain what CBAM is, its key dates, why it’s important, its implications for businesses and international trade, and how your company can stay ahead to maintain compliance.  

What is the Carbon Border Adjustment Mechanism? What you need to know 

The Carbon Border Adjustment Mechanism (CBAM) is the EU’s landmark policy designed to address the challenges associated with emissions in international trade. Specifically, CBAM seeks to impose a new cost on imported goods based on their carbon footprint and prevent what’s called “carbon leakage,” leveling the playing field between domestic EU industries subject to stringent carbon regulations and foreign producers with lower environmental standards. In simpler terms, it’s a carbon tax on imports.  

CBAM is designed to allow for an adjustment, or transition period before coming into full force to minimize the risk of disruptive effects on trade. Here are some key dates to take note of:

Read More at e2open’s Blog