To meet its legislated 2030 and 2050 greenhouse gas emission reduction targets, the European Union (EU) has imposed an emissions trading scheme (ETS) on certain emissions intensive goods, among other emissions reduction measures.
To ensure EU producers have a ‘level playing field’ with producers outside the EU, and to address the risk of carbon leakage, the EU will introduce a Carbon Border Adjustment Mechanism (CBAM). The CBAM will be fully implemented from 1 January 2026.
With existing experience under the New Zealand ETS, and a limited products covered by the CBAM’s current New Zealand’s export profile to the EU, New Zealand producers and exporters should be comparatively well-placed to meet the CBAM’s requirements.
Prepared by: New Zealand Ministry of Foreign Affairs and Trade