Carbon Border Tax
Category: other
A tax on imports based on their carbon footprint, designed to prevent carbon leakage.
Carbon border measures are trade policies that apply carbon pricing or adjustments to imported goods based on their carbon content or the carbon pricing regime of the exporting country. The EU's CBAM is the first major carbon border measure, designed to equalize carbon costs between domestic EU producers and foreign exporters. These measures represent a new category of trade barriers linked to environmental policy.
Examples
- • Carbon border measures may increase costs for carbon-intensive imported goods, affecting pricing strategies for cross-border sellers in metals, chemicals, and building materials.
- • The UK is developing its own carbon border mechanism similar to the EU's CBAM, which will affect imports from countries without equivalent carbon pricing.
- • Sellers of carbon-intensive products should monitor carbon border policies in the EU, UK, and other jurisdictions considering similar measures.