Executive Summary
In early January 2026, the European Union implemented significant carbon reduction measures, including the launch of the Carbon Border Adjustment Mechanism (CBAM) and updates to the Emissions Trading System (ETS). These initiatives aim to align carbon costs for imports with those of EU-produced goods, thereby reducing carbon leakage and promoting cleaner production methods globally. Additionally, the EU introduced new regulations affecting chemicals and public procurement to further support its Green Deal objectives.
Carbon Reduction Activities in Europe: January 2026
Introduction
Between January 5 and January 11, 2026, the European Union (EU) announced and implemented several key initiatives aimed at reducing carbon emissions and promoting sustainable practices across various sectors. These measures are part of the EU’s broader strategy to achieve climate neutrality by 2050, as outlined in the European Green Deal.
Carbon Border Adjustment Mechanism (CBAM)
On January 1, 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) officially came into effect. This mechanism imposes a carbon border tax on imports of emissions-intensive goods such as steel, aluminium, cement, and other heavy industry products. The CBAM is designed to align the carbon costs of imported goods with those produced within the EU, thereby addressing carbon leakage and encouraging non-EU countries to adopt similar carbon pricing measures. The transitional phase of CBAM, which began in 2023, allowed importers to report greenhouse gas emissions without financial obligations. However, from 2026 onwards, importers are required to pay for the carbon emissions embedded in their products. [Source]
Emissions Trading System (ETS) Updates
The EU also published revised auction calendars for the Emissions Trading System (ETS) for 2026. These updates reflect the inclusion of non-CO2 greenhouse gas emissions from maritime transport activities and the cancellation of allowances related to maritime emissions. The ETS continues to be a cornerstone of the EU’s climate policy, setting a common price for carbon and incentivizing reductions in fossil fuel use. The expansion of the ETS to include imports through the CBAM is expected to further enhance its effectiveness. [Source]
Regulatory Changes in Chemicals and Public Procurement
In addition to the CBAM, the EU introduced new regulations affecting chemicals, toys, and public procurement. These measures, effective from January 1, 2026, aim to address regulatory gaps and ensure fair competition within the internal market. The updated rules for chemicals and public procurement are part of the EU’s efforts to strengthen its Green Deal and promote sustainable practices across various sectors. [Source]
Conclusion
The initiatives announced and implemented by the EU in early January 2026 represent significant steps towards achieving its climate neutrality goals. By introducing the CBAM and updating the ETS, the EU aims to reduce carbon leakage and promote cleaner production methods globally. These measures, along with new regulations in chemicals and public procurement, underscore the EU’s commitment to its Green Deal objectives and its leadership in global climate policy.
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