Summary

• The European Union is significantly recalibrating its emissions compliance regime with the Carbon Border Adjustment Mechanism.
• CBAM will gradually tax carbon-intensive imports to ensure they cost the same as domestic goods facing rising carbon pricing at home.
• As carbon prices climb and free allowances disappear, we believe firms with credible transition efforts will gain cost advantages and resiliency.

By Patrick O'Connell, CFA | Paulina Alcantara | Okan Akin, CFA

Managing carbon output may become a key profitability driver under a new EU border tax.

The European Union (EU), pursuing ambitious decarbonization goals, is significantly recalibrating

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