Some reflections on the consistency of the EU CBAM with the GATT

In their fight against climate change, States have repeatedly declared that reducing greenhouse gas (GHG) emissions is a priority with “global reach”. However, since the entry into force of the 1992 United Nations Framework Convention on Climate Change, States have opted for an individualistic and differentiated approach, particularly with regard to climate mitigation. As a result, climate change agreements provide only procedural obligations and lead States to choose how to determine and how to achieve substantial obligations. Against this backdrop, in 2021 the European Commission proposed the adoption of a particularly controversial unilateral trade-related climate measure: the Carbon Border Adjustment Mechanism (CBAM), with the dual intent of combating carbon leakage and levelling the playing field. Given its expected restrictive impact on trade flows in the sectors concerned, the CBAM was from the outset considered by several WTO members to be contrary to WTO law. The purpose of this paper is to analyse the compatibility of the CBAM with the non-discrimination and trade liberalisation commitments undertaken by the EU in the WTO, by reconstructing what could be the outcome of a potential dispute in the light of previous WTO case law.