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Title page 1

Contents 3

Acknowledgements 2

Abbreviations and Acronyms 5

1.0. Overview 6

2.0. The EU CBAM 9

2.1. Context 9

2.2. Key Characteristics and Impacts 12

3.0. The UK CBAM 16

3.1. Context 16

3.2. Key Characteristics and Impacts 17

4.0. Australia's Carbon Leakage Review 21

4.1. Context 21

4.2. Key Characteristics and Impacts 21

5.0. BCA Developments in Other Countries 24

6.0. WTO Discussions 26

7.0. Watching This Space: BCA-related discussions in other forums 31

7.1. ISO/GHG Protocol 31

7.2. OECD Inclusive Forum on Carbon Mitigation Approaches 31

7.3. Climate Club 32

7.4. United Nations Framework Convention on Climate Change Technical Dialogues on Trade and Climate Change 32

7.5. Integrated Forum on Climate Change and Trade 33

References 34

Appendix A. Methodology Used for Mapping WTO Members' Position on Border Carbon Adjustments 39

Tables 4

Table 1. Key features of the EU's CBAM, the UK CBAM, and the BCA described in Australia's Carbon Leakage Review 7

Table 2. Overview of EU CBAM regulatory and compliance milestones (Q2 2026-2028) 11

Table 3. EU trading partners most impacted by its CBAM, in terms of the share of their exports covered by the mechanism, 2024 14

Table 4. The United Kingdom's trading partners most impacted by its CBAM, in terms of the share of their exports covered by the mechanism, 2024 19

Figures 4

Figure 1. Origin of EU CBAM-covered goods to the EU, 2024 13

Figure 2. Imports of EU CBAM goods as a share of total EU imports 15

Figure 3. Origin of CBAM-covered goods to the United Kingdom, 2024 18

Figure 4. Imports of UK CBAM goods as a share of total British imports, 2012-2024 20

Figure 5. Origin of proposed BCA-covered goods to Australia, 2024 22

Figure 6. Australian trading partners most impacted by its proposed BCA, in terms of the share of their exports covered by the mechanism, 2024 23

Figure 7. Imports of Australia's proposed BCA goods, as a share of total Australian imports, 2012-2024 23

Figure 8. Number of statements/proposals concerning BCAs at WTO, 2021-2025 26

Figure 9. Distribution across time of the tone of BCA-related statements, 2021-2025 27

Figure 10. Types of concern expressed in official statements, 2021-2025 28

Boxes 4

Box 1. The EU-India Free Trade Agreement (FTA) and implications for CBAM 12

Box 2. BCA cost implications for businesses 29

Appendix Tables 4

Table A1. Taxonomy of concerns and associated trigger keywords used for coding WTO discussions 40

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