Carbon emissions have a price. The CBAM aims to prevent evasion of EU environmental regulations (e.g. through offshoring). It will tax high-carbon imports, making unsustainable production more costly.
Suppliers in and outside the EU must meet EU environmental standards, such as limiting water use and reducing emissions.
- As of 2023, importers must report greenhouse gas emissions embedded in their goods
- By 2026, importers must purchase CBAM certificates to offset those carbon emissions
Manufacturers can lower their supply chain's carbon footprint by adopting renewable energy and cleaner technologies.