In July 2021, the European Commission published a proposal for a new carbon border adjustment mechanism (CBAM) to address the issue of carbon leakage from products produced outside the European Union. Clifford Chance experts Dan Neidle, Mathias Elspaß, Gail Orton, Nigel Howorth and Janet Whittaker considered the design of CBAM, its ramifications for different sectors (in the EU and abroad), the likelihood of a challenge at the WTO and whether other jurisdictions will follow suit.