---
title: "Carbon Border Adjustment Mechanism — Definition & Meaning"
description: "The Carbon Border Adjustment Mechanism is the EU's tariff on carbon emissions from imports, aimed at preventing carbon leakage and promoting fairness."
url: "https://modeldiplomat.com/learn/glossary/carbon-border-adjustment-mechanism"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Carbon Border Adjustment Mechanism is the European Union's tariff on the embedded carbon emissions of selected imports, designed to prevent carbon leakage and equalise climate costs.
- When does the definitive CBAM regime with actual financial payments begin?
- Which sectors does CBAM initially cover?
- Why do developing countries object to CBAM?
- How does CBAM relate to the EU Emissions Trading System?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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## Timeline

1. 10 May 2023

   The Carbon Border Adjustment Mechanism (CBAM) is a climate-trade instrument of the European Union established by Regulation (EU) 2023/956, adopted on as par…

2. 1 October 2023

   During a transitional phase running from to 31 December 2025, importers face only reporting obligations — they must declare the embedded direct and indirect…

3. 31 December 2025

   During a transitional phase running from 1 October 2023 to , importers face only reporting obligations — they must declare the embedded direct and indirect e…

4. 1 January 2026

   From the definitive regime begins: importers must register as "authorised CBAM declarants," purchase and surrender CBAM certificates priced to the weekly av…

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In 2023 the European Union adopted Regulation 2023/956 creating CBAM, prompting India to warn at the WTO that the levy would unfairly burden its steel and aluminium exporters once payments begin in January 2026.

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