Around the world, CBAM has faced strong criticism. India and China describe it as "green protectionism," arguing that it puts unfair pressure on developing economies. At the same time, the EU has not yet created dedicated funding to help exporters in lower-income countries adapt. Without this support, the mechanism may not achieve the desired results. What about consumers? Although CBAM is mainly aimed at industry, its ripple effects will reach consumers in the EU.
The EU is introducing a carbon border adjustment mechanism (CBAM) on 1 January targeting imports produced using carbon-intensive methods, such as steel, glass and fertiliser. Businesses have been concerned about the impact of the EU tax on UK consumer bills and the prospect of cheap goods originally destined for Europe, such as Chinese steel, flooding the British market. The UK is introducing its own version of the tax but not until 2027.