Carbon Border Adjustment Mechanism (CBAM)

CBAM (Carbon Border Adjustment Mechanism) is a European Union policy instrument that places a carbon tariff on imports of carbon-intensive goods. It is designed to prevent carbon leakage. The risk that companies relocate production to countries with weaker climate policies.

CBAM initially covers cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen, with expansion planned. Importers must purchase CBAM certificates corresponding to the carbon emissions embedded in their imports. For companies sourcing through Speya (formerly Find My Factory), understanding CBAM impacts is essential for cost planning and supplier selection in affected industries.