About CBAM

• • The European Union (EU) has decided to impose a new tax called ‘Carbon Border Adjustment Mechanism’ (CBAM) on the import of carbon-intensive goods in the region. 
    • Refer Pulse Digest June 2023 edition for details about EU.
  • The new tax regime, which is scheduled to come into effect from January 1, 2026, will be initially applicable to steel, aluminium, cement, fertiliser, hydrogen and electricity, and proposed to be expanded to all imports into the EU in due course.
  • CBAM was legislated as part of the European Green Deal.

• The European Green Deal, approved in 2020, is a set of policy initiatives by the European Commission with the overarching aim of making the European Union climate neutral in 2050. The CBAM is part of the package planned to achieve this.