LDCs and the proposed EU Carbon Border Adjustment Mechanism

4 May 2021. The European Union (EU) is in the process of establishing a carbon border adjustment mechanism (CBAM), in the context of the European Green Deal. The CBAM would place a carbon price on imports of certain goods from outside the EU, as a way to reduce the risk of “carbon leakage”.  There is concern that the mechanism could lead to an unfair burden being placed on LDCs, unless there were an exemption.  The text adopted by the European Parliament refers to LDCs as possible beneficiaries of revenues generated by the mechanism, which could increase EU contributions to international climate finance. The final design of the mechanism is still to be defined. The EU was due to launch the mechanism in mid-2021.  Updates forthcoming. More information and considerations on support to LDCs and graduating countries in the context of the CBAM here.