Global climate regulation is evolving, with governments around the world implementing measures to drive decarbonization. Among these efforts, the EU stands out as a leader, with some of the most sophisticated and ambitious carbon pricing mechanisms globally. Policies like the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) aim to use market-based measures to incentivize emitters to reduce greenhouse gas emissions while preventing carbon leakage, creating significant implications for industries like cement and steel. Around the world, countries are adopting diverse regulatory strategies to address decarbonization challenges. As this fragmented regulatory landscape evolves, businesses operating in key markets must adapt to differing priorities and timelines. For European industries, the compliance burden will increase significantly from 2026 on under ETS, and CBAM will introduce new financial obligations. While CBAM seeks to align carbon costs for domestically produced goods and imports, questions remain about its ability to fully protect EU producers from global competition. Successfully navigating this environment will require balancing immediate compliance actions with long-term strategies for competitiveness. As these mechanisms mature, EU producers need to navigate a changing regulatory landscape, balancing rising costs with the need to remain competitive in a global economy decarbonizing at different speeds.

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