The EU’s carbon border adjustment mechanism

The steel and cement industries are the most exposed to international competition and could be among the first to be targeted by the EU's new carbon border levy. [Pinkky_ja / Shutterstock]

When she took office in December last year, European Commission President Ursula von der Leyen announced ambitious new climate goals for Europe and a new border levy aimed at ensuring fair competition with countries that do not impose a carbon constraint on their industries.

A question that has been gripping Brussels since then is how this new Carbon Border Adjustment Mechanism (CBAM) could work while ensuring compliance with WTO rules.

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