China likely to be most affected by the EU’s new Carbon Border Adjustment Mechanism
Alicia García Herrero (Natixis) | On 13th December 2022, the EU passed a deal to set up a Carbon Border Adjustment Mechanism (CBAM) to arrest the carbon leakage problem and further support the energy transition. Carbon leakage in this context equates to the scenario that EU countries import carbon-intensive products from countries where carbon emissions are not taxed. More specifically, under CBAM, EU firms will need to pay the difference…