How do international policy developments impact the Australian carbon market?

While Australia’s climate policy malaise continues, international climate activity continues to build, with the EU last week unveiling its “Fit for 55” plan to reduce greenhouse gas emissions by at least 55% below 1990 levels by 2030, including the long awaited Carbon Border Adjustment Mechanism (CBAM).

The CBAM proposal will require certain importers to pay for emissions embedded in their products from 2023 (with a three-year transition period concluding in 2026). Japan and Canada are working on similar mechanisms, while US Democrats last week announced a “polluter import fee” as part of the federal budget package, that could pass without