Despite significant opposition from some trading partners, the European Commission has enacted reporting rules for its carbon pricing tool known as the Carbon Border Adjustment Mechanism, or CBAM, which will enter into force during a transition phase from October 1, 2023.  CBAM , a key pillar of the EU's Fit for 55 agenda, is the bloc's major tool for preventing carbon leakage. It is designed to ensure that companies operating in the region and beyond remain on the same page when it comes to carbon pricing and environmental impact. Carbon leakage occurs when a company operating in the EU moves its production abroad to countries with less stringent climate regulations. It also occurs when products produced in the region are replaced by imported goods with higher carbon emissions.  Study  estimates that uncontrolled carbon leakage could lead to 15 % increase in global carbon emissions, which will damage climate action . CBAM tries to avoid this.(Jennifer L)