The commission published in July 2021 its proposal to create the CBAM, part of the Fit for 55 climate policy package under the EU Green Deal. The EU emissions trading system requires GHG-emitting industries to buy allowances for every ton of carbon produced. The CBAM requires importers to purchase emissions allowances for imported goods as if those goods had been produced domestically and subjected to the EU ETS. This is to prevent high domestic carbon prices from simply shifting emissions to other countries as EU producers compete with foreign producers that are not subject to a carbon price. Before that happens, the EU Council and the EU Parliament will negotiate to produce final legislation.

Source: Manila Times June 12, 2022 14:05 UTC