The Carbon Border Adjustment Mechanism (CBAM) is an instrument implemented
by the European Union to reduce greenhouse gas emissions and address carbon
leakage. It aims to ensure that imported goods are subject to a carbon price
equivalent to the carbon price of domestic production in the EU.
CBAM affects the iron and steel sector by putting a price on emissions associated
with iron and steel produced in countries outside the EU, with the goal of
encouraging sustainable practices and reducing carbon footprint.