Front-loading and selective re-sourcing: Early trade effects of the EU Carbon Border Adjustment Mechanism
Öne çekme ve seçici kaynak değişimi: AB Sınırda Karbon Düzenleme Mekanizması'nın erken ticaret etkileri
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Abstract
The EU Carbon Border Adjustment Mechanism (CBAM) entered its definitive period in January 2026. This paper provides early evidence on its trade effects using monthly extra-EU imports of 231 HS4 products from 171 partners, January 2019 to August 2026. Poisson triple-difference models compare CBAM goods with related goods and liable partners with exempt EFTA partners; event studies and synthetic difference-in-differences trace the dynamics. Imports of CBAM goods from liable partners rose by 36% in the last quarter of 2025, before the definitive period, and fell by 25% in January–June 2026, most strongly in fertilisers and aluminium. By July–August 2026 the difference had disappeared, and the net effect from October 2025 to August 2026 is small and insignificant. Among liable partners, aluminium imports shifted away from countries with carbon-intensive electricity, whereas sourcing of steel, fertilisers and cement did not respond to carbon intensity. The early effects of CBAM are therefore dominated by the timing of imports and by selective re-sourcing, not by a general retreat from carbon-intensive suppliers.
Keywords
Carbon border adjustment; CBAM; Carbon leakage; International trade; Synthetic difference-in-differences; Poisson pseudo-maximum-likelihood
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