The European Commission proposed a carbon border adjustment mechanism on 14 July 2021, as part of its Fit for 55 package to cut the bloc's emissions by 55 percent by 2030. The mechanism would put a carbon price on imports of iron and steel, cement, aluminium, fertilisers and electricity, to match the cost faced by European producers under the emissions trading system. Importers would have to buy certificates covering the emissions embedded in their goods, preventing carbon leakage, where production moves abroad to avoid climate rules. The proposal envisaged a transition period starting in 2023, with the full system applying from 2026 as free allowances for European industry are phased out. Steel exporters, including China, Russia, Turkey and India, warned the measure would raise costs and disrupt trade, while European steelmakers welcomed it as a condition for investing in low-carbon production. The proposal still needed approval from member states and the European Parliament before it could become law.
Source: Lexology — https://www.lexology.com/library/detail.aspx?g=c5abee17-b13d-42a5-a69e-40d5a2919b60
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