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An overview by Borden Ladner Gervais, Taxand Canada
On 1 January 2026, the EU introduced the world’s first carbon border adjustment mechanism (CBAM) to address carbon leakage and ensure fair competition for EU industries under strict carbon pricing. Importers of high‑carbon goods must report embedded emissions, purchase CBAM certificates, and factor these costs into pricing, with potential offsets for existing foreign carbon pricing.
Owen Clarke and Rambod Behboodi from our Canadian member firm Borden Ladner Gervais have highlighted the opportunities and challenges for Canada.
Low‑carbon aluminium producers could gain a competitive advantage, while energy‑intensive sectors like fertiliser may face higher compliance costs. CBAM also pressures Canadian authorities to align federal and provincial carbon pricing and consider a domestic CBAM, affecting trade competitiveness, reporting obligations, and harmonisation with EU standards.
You can read the full article in more detail here.
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