Legislated as part of the European Green Deal, the Carbon Border Adjustment Mechanism (CBAM) â€“ also referred to as the carbon border tax â€“ is a tariff applied to a range of carbon-intensive products imported by members of the European Union (EU). The CBAM regulation is a component of the European Councilâ€s Fit for 552 package, with the objective of achieving a minimum 55% reduction in greenhouse gas (GHG) emissions by 2030, as measured against 1990 emissions levels. It came into effect in May 2023. CBAM puts a price on carbon-intensive products as they enter the EU, taking into account both direct and indirect emissions (including Scope 1, Scope 2 and some Scope 3). Initial industries covered by EU CBAM are electricity, hydrogen, cement, fertilisers, aluminium and iron & steel. More industrial sectors will be added by 2030 including oil refining, upstream (fuel production), all metals, pulp & paper, glass & ceramics, acids & organic chemicals, aviation, maritime and lime. Whether an organisation manufactures in the EU or is a non-EU-based supplier to these organisations, CBAM compliance requirements apply to in-scope products from October 2023, ahead of the full rollout in 2026.