Proposed CBAM is an import tariff on carbon-intensive goods from abroad. It is applied as an import tax paid by the importer when products enter the European Union, specifically through the purchase of certificates representing embedded emissions in the goods. The cost of certificates will be based on the price of carbon in the EU ETS. By assigning such a carbon price to imports, the CBAM aims to level the playing field by taxing foreign production with less-stringent emissions regulations and reducing the risks of leakage