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Carbon Border Adjustment Mechanism
To prevent “carbon leakage” the European Parliament Reached a Deal on a Carbon Border Adjustment Mechanism, CBAM for short.
An EU Carbon Border Adjustment Mechanism (CBAM) will be set up to equalise the price of carbon paid for EU products operating under the EU Emissions Trading System (ETS) and the one for imported goods. This will be achieved by obliging companies that import into the EU to purchase so-called CBAM certificates to pay the difference between the carbon price paid in the country of production and the price of carbon allowances in the EU ETS.