Global Dialogue on Border Carbon Adjustments

This report summarizes stakeholder dialogues conducted in 2023 and 2024 across Brazil, Canada, Trinidad and Tobago, the United Kingdom, and Vietnam regarding the design and implementation of Border Carbon Adjustments (BCAs). It examines BCAs as a tool to prevent carbon leakage—where economic activity shifts to jurisdictions with less ambitious climate policies—and analyzes the perspectives of government, industry, finance, labour, academia, and civil society on the opportunities and challenges these mechanisms present.

• The European Union and the United Kingdom are leading the implementation of BCAs. The EU's Carbon Border Adjustment Mechanism (CBAM) began a transition period in 2023 requiring emissions reporting, with fees starting in 2026. The United Kingdom intends to implement its own CBAM starting in 2027, notably without a transitional phase.
• Canada faces a high risk of carbon leakage by 2030 in four specific sectors: basic chemicals, fertilizers, pulp and paper, and iron and steel. The cement sector is identified as having a medium risk. These risks are driven by announced climate policies, including an industrial carbon price projected to reach CAD 170/tonne by 2030.
• Stakeholders in Trinidad and Tobago and Vietnam expressed concern that expanding the scope of the EU CBAM could negatively impact exports of specific goods. Trinidad and Tobago is concerned about methanol and liquefied natural gas, while Vietnam is concerned about ceramics, glass, and plastics.
• There is significant disagreement regarding the measurement and reporting of embedded emissions. Brazilian stakeholders criticized the EU CBAM's monitoring methodologies as 'extremely restrictive' and urged the acceptance of international standards like ISO and the GHG Protocol. Additionally, stakeholders in Trinidad and Tobago emphasized that default values are essential for those unable to provide actual data, though they fear these values might be set punitively high.
• Stakeholders in developing nations argue for exemptions or differentiated obligations based on development status. Dialogues in Vietnam cited the Paris Agreement's principle of Common But Differentiated Responsibilities and noted that the EU and UK accounted for 22% of global historical emissions since 1751, compared to China's 12.7%. Stakeholders in Trinidad and Tobago specifically advocated for exemptions for Small Island Developing States.
• Proposed policy responses for countries affected by BCAs include accelerating domestic carbon pricing to retain revenue locally and raising awareness through business associations. Vietnam, for example, plans to launch a pilot carbon credit exchange in 2025. Some stakeholders also consider legal challenges, suggesting the EU CBAM might violate the EU-Vietnam Free Trade Agreement or WTO non-discrimination principles.

APA

Bonnet,, A. (2024). Global Dialogue on Border Carbon Adjustments. International Institute for Sustainable Development. https://www.iisd.org/articles/deep-dive/global-dialogue-border-carbon-adjustments

Chicago

Bonnet,, Antoine. Global Dialogue on Border Carbon Adjustments. International Institute for Sustainable Development, 2024. https://www.iisd.org/articles/deep-dive/global-dialogue-border-carbon-adjustments.

Wikipedia

{{cite report |last1=Bonnet, |first1=Antoine |title=Global Dialogue on Border Carbon Adjustments |publisher=International Institute for Sustainable Development |date=2 August 2024 |url=https://www.iisd.org/articles/deep-dive/global-dialogue-border-carbon-adjustments |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bonnet2024global, author = {Bonnet,, Antoine}, title = {{Global Dialogue on Border Carbon Adjustments}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = aug, url = {https://www.iisd.org/articles/deep-dive/global-dialogue-border-carbon-adjustments}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }