Why we are hyped about tax breaks for climate technology

From this year, the European Union (EU) will commence the full implementation of the Carbon Border Adjustment Mechanism (CBAM), which, until last year, had operated on a pilot basis. The CBAM is a regime that levies charges on goods exported into the EU from jurisdictions where carbon emission regulation is comparatively lax, calculated according to the quantity of carbon emitted in the course of producing the relevant goods. Under the CBAM, the method for recovering carbon-related costs associated with imports is to require importers to procure emission allowances equivalent to those that EU-based operators must obtain under the EU Emissions Trading System (ETS). Notwithstanding this framework, the market price of EU allowances has behaved in 2026 in a manner that diverges from prevailing expectations. As of Jan. 15, 2026, the price per ton of carbon dioxide allowances was €92, the highest level since August 2023, but by Feb. 25, 2026, it had fallen to €72 per ton, a reduction of approximately 20 percent. This depreciation is principally attributable to increased uncertainty surro

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