Summary Description
- Creates a carbon price on the importation of goods from sectors high in GHG emissions.
- TopicThe topic of the legislation or policy covered by the text
- Animal healthClimate & environmental protectionTaxation
- SpeciesThe animal, or type of food production, covered by the text
- JurisdictionCountry or geographical area where the text applies
- EU
- Sub-jurisdictionCountry or state where the text applies
- N/A
- Type of ActWhether the act is a law, regulation, or policy, or another type of text
- Legislation
- StatusIndicates whether the act is in force or not
- In force
- Legal ValueWhether the text is binding or not
- N/A
- Date enactedDate the text was adopted
- N/A
- Date updatedDate when the entry was last updated by the CALF team
- June, 2023
- Official citation
- Regulation 2023/956 Establishing a Carbon Border Adjustment Mechanism, 2003 OJ L 130/52�104
Strengths & Weaknesses
- Strengths
- Creates a uniform framework to ensure that similar carbon taxation policy is applied both in the EU�s internal market and on imported goods, and is linked to the EU Emission Trading System (ETS).
- Tackles the conduct of shifting business and emissions to other countries with lower environmental standards and taxes (i.e., �carbon leakage�).
- Encourages more sustainable production process in countries which seek to import goods to the EU, while ensuring WTO compatibility. Includes a monitoring and reporting mechanism (starting in 2023).
- Weaknesses
- In its first implementation phase, the EU's Carbon Adjustment Mechanism will not apply to agriculture nor livestock.
- There exist concerns regarding unfair economic impact on lower income and climate vulnerable countries, which depend on the EU's high export capacity as a result of the EU's manufacturing sectors' relocation in developing countries.