Carbon Border Adjustment Is the Policy Accelerant

The EU's Carbon Border Adjustment Mechanism (CBAM) entered its transitional reporting phase in October 2023 and moves to full pricing from January 2026 — covering steel, cement, aluminum, fertilizers, hydrogen, and electricity. At a carbon price of €60–80/tonne (current EU ETS range), CBAM adds €30–50 per tonne of steel and €50–80 per tonne of cement imported into the EU. This is a structural, permanent competitive disadvantage for high-carbon producers selling into European markets, and a direct subsidy equivalent for green producers. It also creates pressure for the U.S. to adopt a domestic equivalent (Clean Competition Act proposals) to avoid export disadvantage. CBAM is perhaps the single most important industrial decarbonization policy in force globally today.