The Carbon Border Adjustment Mechanism is the subject of our new episode.
In the European Union, a quarter of greenhouse gas emissions are caused by energy or industrial processes, particularly upstream production (steel, cement, and glass). For 20 years, this sector has been strongly encouraged to decarbonize through the emissions trading system, which reduces allowances over time. However, there are risks associated with this: production may be relocated to avoid this regulation, or competition with foreign companies may be distorted. To ensure that European companies are protected from those risks, the EU has created a carbon tax at Europe's borders as part of its Green Deal. Why is this carbon border adjustment mechanism (CBAM) necessary? How does it work? Nicolas Berghmans answers Sophie Larmoyer's questions.
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