The European Union (EU) aims to become the first climate-neutral economic bloc by 2050, through the EU Green Deal. In 2021, the EU strengthened this commitment by adopting the “Fit for 55” package, which upholds an interim target of reducing net greenhouse gas emissions by at least 55% by 2030 from a 1990 baseline. This ambition poses an increased risk of carbon leakage—where carbon-intensive industries shift production to economies with less stringent environmental regulations. To address potential carbon leakage, the EU Green Deal includes the Carbon Border Adjustment Mechanism (CBAM), which imposes a carbon tariff on carbon-intensive products such as iron and steel, cement, fertilizers, aluminum, electricity, and hydrogen. These items were selected because they are highly susceptible to carbon leakage and create significant carbon emissions that nevertheless can be tracked (Simões 2023). The European Commission considers CBAM a “landmark tool” for putting a fair price on carbon emissions generated during the production of identified goods (European Commission n.d.). The CBAM imposes a carbon price on imports of emissions-intensive and trade-exposed (EITE) goods to ensure they have a similar carbon price to domestic products.