Hedging the CBAM

What the EU's carbon border tax might means for carbon investors

Beginning in 2026 the impact of EU carbon prices will be felt far from its borders.

This is when the EU’s Carbon Border Adjustment Mechanism (CBAM) is scheduled to come into force. In short, the CBAM will act as an import levy on carbon intensive products imported into the EU.

The impact of policy change is already being felt with industries that are exposed to carbon intensive products entering the EU examining different ways they can hedge their future carbon exposure.

But before we get to that, what exactly is the CBAM?