On March 15, the EU member states have reached consistency in the Carbon Tariff (Carbon Border Adjustment Mechanism, CBAM). It is the first proposal for the world to respond to climate change by carbon tariffs.

The proposal will be implemented from January 1, 2023, covering the European market’s industries of electricity, steel, cement, aluminum, and fertilizers.

The pilot period is from 2023 to 2025. During the period, products involved only need to fulfill the obligations to report carbon emissions and the EU will not impose any fees.

Carbon tariffs will be officially introduced in 2026. The free quota for enterprises will be completely canceled until 2035. During the period, importers should pay carbon fees according to the carbon emissions generated in the production process.