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Summary:
Legislative initiative tabled by the European Commission on 14 July 2021 establishing a new Carbon Border Adjustment Mechanism (CBAM). This is a text with EEA relevance.
Further information:
The European Commission first announced its intention to propose a CBAM in its Communication setting out the European Green Deal, applicable to selected sectors to reduce the risk of carbon leakage. The mechanism aims to ensure that the price of imports reflect more accurately their carbon content, should differences in levels of ambition worldwide persist. This measure is designed to comply with World Trade Organisation (WTO) rules and other international obligations of the European Union (EU).
The CBAM is seen as an alternative to the measures that address the risk of carbon leakage in the EU's Emissions Trading System (EU ETS), and it is meant to avoid that the emissions reduction effort of the EU are offset by increasing emissions outside of the EU through relocation of production or increased imports of less carbon-intensive products.
The draft law was unveiled by the European Commission on 14 July 2021, as part of the so-called Fit for 55 legislative package. The Council of the European Union adopted its general approach on 15 March 2022. The European Parliament's relevant committee adopted a preliminary position on 17 May.
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Related Links |
- Commentary and Analysis
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Wikipedia: Carbon Border Adjustment Mechanism
https://en.wikipedia.org/wiki/Carbon_Border_Adjustment_Mechanism
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PwC (Netherlands): Services: Carbon Border Adjustment Mechanism
https://www.pwc.nl/en/services/tax/managing-tax-and-energy-transition/fit-for-55/carbon-border-adjustment-mechanism.html
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European Environmental Bureau (EEB): Towards a Carbon Border Adjustment in Europe – EEB response to public consultation (28 October 2020)
https://eeb.org/library/towards-a-carbon-border-adjustment-in-europe-eeb-response-to-public-consultation/
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LSE: Grantham Institute: Policy Publications, 01/04/2021: What does an EU Carbon Border Adjustment Mechanism mean for the UK?
https://www.lse.ac.uk/granthaminstitute/publication/what-does-an-eu-carbon-border-adjustment-mechanism-mean-for-the-uk/
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Centre for European Reform (CER): Insights, 05/07/2021: Avoiding the pitfalls of an EU Carbon Border Adjustment Mechanism
https://www.cer.eu/insights/avoiding-pitfalls-eu-carbon-border-adjustment-mechanism
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White&Case: Alert, 15/07/2021: Fit for 55: EU moves to introduce carbon border adjustment mechanism
https://www.whitecase.com/publications/alert/fit-55-eu-moves-introduce-carbon-border-adjustment-mechanism
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Bruegel: Blog, 19/07/2021: The European Union’s carbon border mechanism and the WTO
https://www.bruegel.org/2021/07/the-european-unions-carbon-border-mechanism-and-the-wto/
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Pinsent Masons: Out-Law News, 19/07/2021: European Commission outlines plan for carbon border adjustment mechanism
https://www.pinsentmasons.com/out-law/news/european-commission-outlines-plan-for-carbon-border-adjustment-mechanism
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FreshFields Bruckhaus Deringer: Briefings, 22/07/2021: CBAM: Europe’s attempt to prevent carbon leakage
https://www.freshfields.com/en-gb/our-thinking/knowledge/briefing/2021/07/cbam-europes-attempt-to-prevent-carbon-leakage/
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Veblen Institute: Publications, 23/07/2021: The conditions for an effective and fair carbon border adjustment mechanism
https://www.veblen-institute.org/The-conditions-for-an-effective-and-fair-carbon-border-adjustment-mechanism.html
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International Institute for Sustainable Development (IISD): Commentary, 28/07/2021: EU Unveils Planned Carbon Tax on Imports Amid U.S., Japanese Concerns
https://sdg.iisd.org/commentary/policy-briefs/eu-unveils-planned-carbon-tax-on-imports-amid-u-s-japanese-concerns/
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Ernst&Young (EY): Tax Alerts, 29/07/2021: European Commission releases proposal for a Carbon Border Adjustment Mechanism
https://www.ey.com/en_gl/tax-alerts/european-commission-releases-proposal-for-a-carbon-border-adjustment-mechanism
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Deutsche Welle, 03/08/2021: EU's new carbon scheme — how will it affect trade with ASEAN?
https://p.dw.com/p/3yTC6
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UK in a Changing Europe: Commentary, 03/08/2021: CBAM: what might an EU Carbon-Border Adjustment Mechanism mean for the UK?
https://ukandeu.ac.uk/eu-cbam-uk/
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The Economist, 07/08/2021: The EU’s proposed carbon tariff gets a mixed reaction from industry
https://www.economist.com/business/2021/08/07/the-eus-proposed-carbon-tariff-gets-a-mixed-reaction-from-industry
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GMFUS: Policy Briefs, 03/09/2021: The EU’s Triangular Dilemma on Climate and Trade
https://www.gmfus.org/news/eus-triangular-dilemma-climate-and-trade
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Heinrich Böll Foundation: Analysis, 13/09/2021: The proposal for a Carbon Border Adjustment Mechanism fails the ambition and equity tests
https://eu.boell.org/en/2021/09/13/proposal-carbon-border-adjustment-mechanism-fails-ambition-and-equity-tests
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Oxford University: Practical Ethics, 14/09/2021: The Morality of Carbon Border Taxes
https://blog.practicalethics.ox.ac.uk/2021/09/the-morality-of-carbon-border-taxes/
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Foreign Policy, 17/09/2021: China and the United States Could Sabotage EU Emission Efforts Again
https://foreignpolicy.com/2021/09/17/china-united-states-european-union-greenhouse-gas-emissions/
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EIAS: Op-Ed, 21/09/2021: Mitigating Opposition to the Carbon Border Adjustment Mechanism: Engaging BRICS and the Global South
https://eias.org/op-ed/mitigating-opposition-to-the-carbon-border-adjustment-mechanism-engaging-brics-and-the-global-south/
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Cambridge University: Cambridge Institute for Sustainability Leadership: Working Paper, October 2021: On the Borderline: The EU CBAM and its place in the world of trade
https://www.cisl.cam.ac.uk/resources/publications/eu-cbam-and-its-place-world-trade
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Plastics Europe: Knowledge Hub, October 2021: Position Paper - Carbon Border Adjustment Mechanism (CBAM)
https://plasticseurope.org/knowledge-hub/carbon-border-adjustment-mechanism-cbam/
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Italian Institute for International Political Studies (ISPI): Commentary, 05/10/2021: The Carbon Border Adjustment Mechanism: A Call for Cooperation on Carbon Pricing
https://www.ispionline.it/en/pubblicazione/carbon-border-adjustment-mechanism-call-cooperation-carbon-pricing-32211
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European Aluminium: Preliminary Assessment - Draft Regulation on the introduction of an EU Carbon Border Adjustment Mechanism (7 October 2021)
https://www.european-aluminium.eu/media/3299/07-10-2021-european-aluminium_preliminary-views-on-draft-cbam-proposal-final.pdf
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European Tax: Blog, 12/10/2021: Graphite or Diamonds? The complications of Carbon Border Adjustment Mechanism(s)
https://www.europeantax.blog/post/102h7t4/graphite-or-diamonds-the-complications-of-carbon-border-adjustment-mechanisms
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Open Society Foundations: Voices, 21/10/2021: The EU Must Think Globally on Carbon Import Tax
https://www.opensocietyfoundations.org/voices/the-eu-must-think-globally-on-carbon-import-tax
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Peterson Institute for International Economics (PIIE): Policy Briefs, November 2021: Can EU carbon border adjustment measures propel WTO climate talks?
https://www.piie.com/publications/policy-briefs/can-eu-carbon-border-adjustment-measures-propel-wto-climate-talks
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European Centre for International Political Economy (ECIPE): Policy Briefs, November 2021: Europe’s Carbon Border Adjustment Mechanism: Time to Go Back to the Drawing Board
https://ecipe.org/publications/europe-carbon-border-adjustment-mechanism/
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Harvard International Review, 17/11/2021: The European Union, the Carbon Border Adjustment Mechanism, and Global Climate Leadership
https://hir.harvard.edu/the-european-union-the-carbon-border-adjustment-mechanism-and-global-climate-leadership/
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Institute for European Environmental Policy (IEEP): Publications, 18/11/2021: Climate ambition and justice: A compass for the CBAM design
https://ieep.eu/publications/climate-ambition-and-justice-a-compass-for-the-cbam-design
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E3G: Letters, 13/12/2021: EU’s Carbon Border Adjustment Mechanism — Joint NGO statement
https://www.e3g.org/news/eu-carbon-border-adjustment-mechanism-cbam-joint-ngo-statement/
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EPRS: Briefing, January 2022: ‘Fit for 55’ package: Carbon border adjustment mechanism - Initial Appraisal of a European Commission Impact Assessment
https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)699473
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Institute of International & European Affairs: Blog, 20/01/2022: CBAM: An EU Foreign Climate Policy
https://www.iiea.com/blog/cbam-an-eu-foreign-climate-policy
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CEPR: VoxEU: Article, 23/01/2022: Japan should lead the global effort to decarbonise: Reflections on the EU’s Carbon Border Adjustment Mechanism
https://voxeu.org/article/reflections-eu-s-carbon-border-adjustment-mechanism
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SP Global: Market Insights, 09/02/2022: CBAM may not work without policy adopted for steel exporters: webinar
https://www.spglobal.com/commodity-insights/en/market-insights/latest-news/metals/020922-cbam-may-not-work-without-policy-adopted-for-steel-exporters-webinar
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Stockholm Environment Institute (SEI): Discussion Briefs, 10/02/2022: Swedish policy positions and perspectives on CBAM
https://doi.org/10.51414/sei2022.004
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Carbon Market Watch: Opinion, 24/02/2022: CBAM: Exploring MEP Chahim’s draft report
https://carbonmarketwatch.org/2022/02/24/cbam-exploring-mep-chahims-draft-report/
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Ernst&Young (EY): Article, 04/03/2022: Carbon Border Adjustment Mechanism (CBAM) update and its impact on the EU cross-border imports
https://www.ey.com/en_ch/tax/green-taxes/carbon-border-adjustment-mechanism
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Institute for European Environmental Policy (IEEP): Publications, 07/03/2022: Summary for decision-makers: Four guiding principles for CBAM design and implementation
https://ieep.eu/publications/summary-for-decision-makers-four-guiding-principles-for-cbam-design-and-implementation
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French Institute of International Relations (IFRI): Brefings, 09/03/2022: The EU’s Carbon Border Adjustment Mechanism: A Piece in the Industry Decarbonization Puzzle
https://www.ifri.org/en/publications/briefings-de-lifri/eus-carbon-border-adjustment-mechanism-piece-industry
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European Environmental Bureau (EEB): Joint NGO statement on the Carbon Border Adjustment Mechanism (CBAM) ahead of the ECOFIN Meeting (10 March 2022)
https://eeb.org/wp-content/uploads/2022/03/NGO-statement-on-CBAM-for-ECOFIN-meeting_March-2022.pdf
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Tax Foundation, 18/03/2022: Russia’s Ukrainian War Could Impact EU Carbon Proposal Too
https://taxfoundation.org/eu-carbon-border-adjustment-mechanism-cbam/
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Heinrich Böll Foundation (Tel Aviv): Explainer, 21/03/2022: What is the EU’s Carbon Border Adjustment Mechanism and what does it mean for Israel?
https://il.boell.org/en/2022/03/21/what-eus-carbon-border-adjustment-mechanism-cbam
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Centre for Economic Policy Research (CEPR): VoxEU, 26/03/2022: The EU in search of a WTO-compatible Carbon Border Adjustment Mechanism
https://voxeu.org/article/search-wto-compatible-carbon-border-adjustment-mechanism
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EurActiv: Opinion, 31/03/2022: United States lawmakers are at a CBAM tipping point
https://www.euractiv.com/section/energy-environment/opinion/united-states-lawmakers-are-at-a-cbam-tipping-point/
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SP Global: Commodity Insights, 28/04/2022: EU carbon border charge threatens exports: AEGIS Europe
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/042822-eu-carbon-border-charge-threatens-exports-aegis-europe
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Centre for Strategic & International Studies (CSIS): Analysis, 17/05/2022: The CBAM, Sectoral Averages, and the Need for Granularity
https://www.csis.org/analysis/cbam-sectoral-averages-and-need-granularity
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Clingendael: Alert, 24/05/2022: The CBAM effect: the world's response to the EU's climate stick
https://www.clingendael.org/publication/cbam-effect-worlds-response-eus-climate-stick
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EPRS: Briefing, May 2022: EU carbon border adjustment mechanism: Implications for climate and competitiveness
https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)698889
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EPRS: At a Glance, June 2022: EU carbon border adjustment mechanism
https://www.europarl.europa.eu/thinktank/en/document/EPRS_ATA(2022)729462
- News
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EUObserver, 16/07/2021: EU carbon border tax to target imports from 2026
https://euobserver.com/climate/152460
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TIME Magazine, 26/07/2021: John Kerry on Border Carbon Tax: The U.S. Doesn't Want to Push Others Away
https://time.com/6084078/john-kerry-border-carbon-mechansim-cbam/
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Reuters, 01/09/2021: EU's planned carbon border tax to impact Russia the most - study
https://www.reuters.com/business/environment/eus-planned-carbon-border-tax-impact-russia-most-study-2021-09-01/
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The Guardian, 28/10/2021: EU carbon border levy could sabotage climate goals, says thinktank
https://www.theguardian.com/environment/2021/oct/28/eu-carbon-border-levy-could-sabotage-climate-goals-says-thinktank
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Argus Media, 08/12/2021: Doubts persist on suitability of EU CBAM
https://www.argusmedia.com/en/news/2281231-doubts-persist-on-suitability-of-eu-cbam
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Politico, 23/12/2021: London mulls carbon border tax with an eye on Brussels
https://www.politico.eu/article/carbon-border-tax-carbon-pricing-steve-barclay-carbon-leakage-cbam/
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EurActiv, 11/01/2022: Lawmaker drafts ‘complete overhaul’ of EU carbon border levy
https://www.euractiv.com/section/energy-environment/news/eu-lawmaker-drafts-complete-overhaul-of-carbon-border-levy/
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RFI News, 20/01/2022: EU ministers mull climate policy, carbon border tax
https://www.rfi.fr/en/eu-ministers-mull-climate-policy-carbon-border-tax
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EurActiv, 15/02/2022: EU in balancing act over carbon border levy, industry concerns
https://www.euractiv.com/section/energy-environment/news/eu-in-balancing-act-over-carbon-border-levy-industry-concerns/
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EUObserver, 17/05/2022: MEPs raise ambition on EU carbon market reform
https://euobserver.com/green-economy/154969
- Official
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EUR-LEX: SWD(2021)643: Staff Working Document accompanying the Proposal - Impact Assessment Report
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:643:FIN
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EUR-LEX: SWD(2021)644: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment Report
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:644:FIN
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EUR-LEX: SWD(2021)647: Staff Working Document accompanying the Proposal - Subsidiarity Grid
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:647:FIN
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European Parliament: Legislative Observatory: Procedure File for Proposal on Carbon Border Adjustment Mechanism. 'Fit for 55 package' (2021/0214(COD))
https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/0214(COD)
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European Parliament: Legislative Train Schedule: Carbon Border Adjustment Mechanism as part of the European Green Deal
https://www.europarl.europa.eu/legislative-train/theme-a-european-green-deal/file-carbon-border-adjustment-mechanism
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European Commission: DG Taxation and Customs Union: Green Taxation: Carbon Border Adjustment Mechanism
https://ec.europa.eu/taxation_customs/green-taxation-0/carbon-border-adjustment-mechanism_en
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European Commission: Better Regulation: Have Your Say: EU Green Deal (carbon border adjustment mechanism)
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12228-EU-Green-Deal-carbon-border-adjustment-mechanism-_en
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Norwegian Government: Letter, 02/07/2021: Carbon Border Adjustment Mechanism – Preliminary Norwegian Positions
https://www.regjeringen.no/en/find-document/dep/FIN/anbud-konsesjoner-og-brev/Publications-in-English-or-translated-in/utvalgte-brev/2021/carbon-border-adjustment-mechanism-preliminary-norwegian-positions/id2865475/
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European Commission: Press Release, 14/07/2021: European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3541
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European Commission: Carbon Border Adjustment Mechanism: Questions and Answers (14 July 2021)
https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_3661
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EPP EP Group: Newsroom, 21/12/2021: De-carbonise, not de-industrialise Europe
https://www.eppgroup.eu/newsroom/news/de-carbonise-not-de-industrialise-europe
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Norwegian Government: Letter, 02/03/2022: Carbon Border Adjustment Mechanism – Norwegian Positions
https://www.regjeringen.no/en/find-document/dep/FIN/anbud-konsesjoner-og-brev/Publications-in-English-or-translated-in/utvalgte-brev/2022/carbon-border-adjustment-mechanism-norwegian-positions/id2902803/
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Council of the European Union: Press Release, 15/03/2022: Council agrees on the Carbon Border Adjustment Mechanism (CBAM)
https://www.consilium.europa.eu/en/press/press-releases/2022/03/15/carbon-border-adjustment-mechanism-cbam-council-agrees-its-negotiating-mandate/
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European Parliament: Press Release, 17/05/2022: CBAM: MEPs push for higher ambition in new carbon leakage instrument
https://www.europarl.europa.eu/news/en/press-room/20220516IPR29647/
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