The world's first carbon border tax is set to be implemented soon, disrupting international trade.

The European Union is less than three months away from launching its pioneering carbon levy—the world’s first large-scale border tax on carbon-intensive goods.

This significant move, part of the EU’s broader strategy to reduce greenhouse gas emissions from heavy industries and encourage greener production worldwide, could significantly reshape global trade.

Beginning January 1 next year, the EU’s Carbon Border Adjustment Mechanism (CBAM) will apply a charge to imported goods such as steel, fertilizers, cement, aluminum, and hydrogen from outside the 27 member states.

Under the policy, importers will need to buy CBAM certificates to offset the emissions linked to these products. The price of these certificates is expected to align with the current EU Emissions Trading System (ETS) market price.