REGULATION (EU) 2023/956 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 10 May 2023 establishing a Carbon Border Adjustment Mechanism

Regulation (EU) 2023/956 establishes a Carbon Border Adjustment Mechanism (CBAM), which aims to prevent "carbon leakage" by applying a carbon price to imports of certain products into the European Union. This mechanism seeks to ensure that imported goods are taxed in an equivalent way to products manufactured in the EU under its emissions trading system (ETS). The CBAM also aims to incentivize exporting countries to reduce their greenhouse gas emissions and align with the climate goals of the Paris Agreement. The regulation covers specific sectors, such as steel, cement, aluminum, fertilizers, among others, and will be gradually applied from 2026.