Traders expect more carbon border taxes

EU’s Cbam model likely to be replicated as national emission reduction schemes move at different speeds, global trading companies say

More governments are expected to follow the EU’s lead in imposing carbon border taxes as domestic emissions reduction policies move at different speeds over the coming decades, major carbon traders told the recent FT Commodities Summit. The EU plans to phase in a Carbon Border Adjustment Mechanism (Cbam) from 2026, imposing a carbon tax on goods entering the bloc unless the exporter has already paid for its emissions in its home market. The move is designed to tackle ‘carbon leakage’, where EU producers that have to pay for their carbon emissions are put at a competitive disadvantage to overseas producers that do not. “Over the next decade, for countries to increase their domestic [emissions