Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333982 
Year of Publication: 
2025
Series/Report no.: 
ETLA Report No. 162
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
This study examines the impacts of the European Union's Carbon Border Adjustment Mechanism (CBAM) on corporate costs, adaptation strategies, and international trade. CBAM aims to supplement the EU's emissions trading system and mitigate the risk of carbon leakage. The report evaluates the effects of CBAM's initial phase and anticipates its future significance for Finnish enterprises. Through the use of gravity modeling, the study distinguishes the effects of CBAM from other trade-influencing factors. Furthermore, companies were surveyed regarding the administrative expenses incurred by CBAM and its influence on value chains. Findings indicate that CBAM decreases imports of covered products from non-EU countries and promotes intra-EU procurement. The system's complexity and associated costs are deemed particularly burdensome for small businesses.
Subjects: 
Carbon leakage
Carbon border adjustment mechanism
Gravity model
Survey
Administrative cost
JEL: 
Q38
Document Type: 
Research Report

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