In numerous countries, CBAM is speeding up interest in renewable energy and cleaner industrial methods. Many regard it not as a threat but as an opening to attract investment and establish themselves as low‑carbon manufacturing centres.
Nonetheless, the mechanism remains contentious. For businesses, CBAM is complex and administratively burdensome. Companies must put in place robust systems to quantify embedded emissions, gather supplier data, and issue environmental product declarations. Many will also need new renewable‑energy contracts to reduce their carbon footprints.
Globally, CBAM has met with considerable criticism. India and China label it “green protectionism,” arguing that it places unfair pressure on developing economies. At the same time, the EU has not yet set up dedicated funding to help exporters in lower-income countries adapt. Without that support, the policy may fail to deliver its intended outcomes.
How will consumers be affected?
While CBAM targets industry, its knock‑on effects will reach consumers in the EU. Importers are unlikely to absorb the full additional cost, so prices are expected to rise—especially for products that rely heavily on steel, aluminium, or cement. This could drive up costs for cars, household appliances, electronics, building materials and, indirectly, food production (via fertilisers).
At the same time, CBAM could increase transparency. Because importers must report the emissions embedded in their goods, consumers may eventually have clearer information about the climate impact of what they buy.
The mechanism will also generate EU revenues from certificate sales. These funds are expected to support vulnerable households across many European countries, as well as finance clean technologies and improve energy efficiency. How the revenues are allocated will be crucial to public acceptance of Europe’s new carbon tax.
Even before full implementation, CBAM is already reshaping supply chains and influencing government policies far beyond Europe’s borders. It could prompt trade disputes, push exporters to adopt carbon pricing, and highlight the need for more climate finance to help developing countries through green industrial transitions.
For many European consumers, this will likely mean gradual price increases—and possibly more climate‑conscious purchasing choices. Behind the scenes, it marks a notable shift in how global trade accounts for carbon and how climate policy touches everyday life.
Simona Sagone, PhD Candidate, Green Finance, Lund University; University of Palermo. This article is republished from The Conversation under a Creative Commons license. Read the original article.
