EU Carbon Tariff Likely to Have Limited Impact on Emissions Without Global Efforts

SINGAPORE (26 February 2024) — European Union (EU) import charges on carbon-intensive products are expected to have a limited impact on climate change and only a modest negative effect on economies in Asia and the Pacific, according to research by the Asian Development Bank (ADB).The EU’s Carbon Border Adjustment Mechanism (CBAM), set to go into force in 2026, will impose import charges on products such as steel, cement, and electricity, based on the carbon dioxide emissions embedded in their production. The charges are aimed at curbing “carbon leakage,” the result of polluters moving production from countries with stringent regulations or high carbon prices to those with less stringent regulations or lower prices.

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