Carbon Border Adjustment Mechanism as a Challenge for Global Trade

Abstract

This article examines the Carbon Border Adjustment Mechanism (CBAM) as a regulatory instrument of the European Union, situated at the intersection of international trade law, customs law and environmental protection. The primary objective of the study is to assess the legal nature of the CBAM, evaluate its compatibility with World Trade Organisation (WTO) law and analyse its implications for sustainable global trade governance and climate policy. Particular attention is paid to Articles I, III and XX of the GATT, as well as relevant WTO case law, including the cases of United States—Gasoline, United States—Shrimp, European Communities—Asbestos and Brazil—Retreaded Tyres. The study further examines the procedural transformation of customs authorities, particularly in relation to the verification of emissions, the burden of proof and administrative enforcement. The article also assesses the environmental effectiveness of the CBAM in preventing carbon leakage and in enforcing higher environmental standards in third countries, addressing the legal and economic issues of discrimination, proportionality, administrative complexity and potential impact on developing economies. The research is based on doctrinal legal analysis, comparative legal methodology and a review of relevant international and European legal sources, including WTO case law and Regulation (EU) 2023/956. The authors demonstrate that the CBAM represents a hybrid regulatory mechanism combining elements of environmental taxation, regulatory charges and trade policy instruments implemented through customs procedures. The originality of the article lies in its integrated and comprehensive analysis of the CBAM from the perspective of customs law, international trade law and environmental regulation with a focus on sustainability. In contrast to existing studies focusing primarily on trade or climate aspects, the article highlights the evolving regulatory role of customs authorities in the framework of European Union climate governance. The findings suggest that the CBAM is generally compatible with WTO law, provided that it is implemented in a transparent, proportionate, flexible and non-discriminatory manner. The authors conclude that the CBAM can become an important model for the future development of sustainable international economic regulation and climate-related trade governance.