The CBAM acts like a border tariff charged on carbon emissions. Importers of in-scope goods must calculate the embedded carbon emissions inherent in those goods and ultimately pay ‘top ups’ for those emissions. CBAM’s purpose is to dissuade the importation of lower cost goods from outside of the EU at the expense of the environment. It's already in force, but tariffs aren't payable until 2026.
The goods directly impacted by CBAM are:
iron (ore)
steel
aluminium
hydrogen
cement
fertiliser
electricity.
Find out more about the impact of ESG on tax requirements