CBAM
Acronym for: Carbon Border Adjustment Mechanism
The EU's carbon price on imported goods' embedded emissions; affects solar imports via aluminum frames and steel mounting.
Detailed Explanation
CBAM (Carbon Border Adjustment Mechanism) is the EU's policy to prevent carbon leakage. It places a carbon price on imports matching what EU domestic producers pay via ETS. CBAM currently covers: cement, iron/steel, aluminum, fertilizers, hydrogen, electricity. Solar modules are not directly covered but their aluminum frames and steel mounting ARE. Transitional reporting phase ran Oct 2023 - Dec 2025. Financial obligation started Jan 2026, with full ETS-equivalent pricing by 2034. Estimated 2026 cost impact on solar: $0.001-0.003/W; by 2034: $0.006-0.010/W.
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