The EU's Carbon Border Adjustment Mechanism is set to have far-reaching impacts on world trade and the wider energy transition.

Phasing in from 2026, CBAM will levy a carbon tax on imports of selected energy intensive materials and products into the EU, removing the gap between the EU's ETS carbon price and the export country of origin's carbon price.

Analysis by S&P Global Commodity Insights shows Canada, Brazil, South Africa and Turkey will be most exposed to the mechanism, with iron and steel by far the biggest sector targeted.

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Related Insight Blog entry: CBAM, ETS reform to impact fertilizer trade

Related podcast: How will the EU's Carbon Border Adjustment Mechanism affect global trade and carbon pricing?

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