As carbon markets evolve, aligning policy tools will shape who decarbonizes—and who falls behind.

The Climate Action Center of Excellence (CACE) and HFW present a briefing that examines how the EU’s Carbon Border Adjustment Mechanism (CBAM) can work alongside Article 6.2 of the Paris Agreement to accelerate climate action while addressing equity concerns for trading partners.

With CBAM moving from its transitional phase to full application, governments and companies face a clear question: how to reduce exposure to carbon costs while channeling finance into real emission reductions.

What’s Inside

• A clear overview of CBAM—its timeline, covered sectors, and implications for importers and exporters.
• A concise primer on Article 6.2 cooperative approaches, ITMOs, and how public–private partnerships can mobilize finance.
• Two practical pathways to align systems: (1) Integration, using ITMOs as an equivalent or partial settlement against CBAM liabilities; (2) Co-existence, where Article 6 finance reduces embedded emissions—and thus CBAM exposure—over time.

The briefing also addresses additionality and NDC alignment, funding options (including potential use of CBAM revenues), and sector examples to guide near-term decisions.

Whether you are a policy maker, exporter, or buyer navigating supply-chain decarbonization, this briefing offers a focused roadmap to coordinate investments, manage risk, and deliver measurable climate impact.