Definition
The European Union's carbon tariff on imported goods, designed to stop companies dodging EU climate rules by manufacturing in countries with weaker carbon pricing. After a reporting-only transition that began in October 2023, the definitive regime applies from 2026: EU importers must buy CBAM certificates priced against the EU carbon market for the embedded emissions in covered goods — cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. It matters enormously to South African exporters of steel and aluminium into the EU, because the buyer's CBAM cost is driven by the SA producer's emissions data and the carbon price already paid locally (such as SA carbon tax).