DS: European Union and its Member States — Carbon Border Adjustment Mechanism

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Key facts

 

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the Russian Federation

On 12 May 2025, the Russian Federation requested consultations with the European Union and its member States with respect to measures concerning the European Union's Carbon Border Adjustment Mechanism (the CBAM Package), and with respect to an export subsidy that the European Union allegedly provides under the Scheme for Greenhouse Gas Emission Allowances Trading.

The Russian Federation claimed that the CBAM Package appears to be inconsistent with:

• Articles I:1, II:1(a), II:1(b), III:1, III:2, III:4, X:3(a), and XI:1 of the GATT 1994;
   
• Paragraph 2, second sentence, of Bulgaria's Protocol of Accession and General Council Decision of 2 October 1996, in conjunction with paragraphs 25 and 92 of the Working Party Report on Bulgaria's accession to the WTO;
   
• Paragraph 2, second sentence, of Latvia's Protocol of Accession and General Council Decision of 14 October 1998, in conjunction with paragraphs 40 and 131 of the Working Party Report on Latvia's accession to the WTO;
   
• Paragraph 2, second sentence, of Estonia's Protocol of Accession and General Council Decision of 21 May 1999, in conjunction with paragraphs 41 and 141 of the Working Party Report on Estonia's accession to the WTO;
   
• Paragraph 2, second sentence, of Croatia's Protocol of Accession and General Council Decision of 17 July 2000, in conjunction with paragraphs 47 and 225 of Working Party Report on Croatia's accession to the WTO;
   
• Paragraph 2, second sentence, of Lithuania's Protocol of Accession and General Council Decision of 8 December 2000, in conjunction with paragraphs 42 and 189 of the Working Party Report on Lithuania's accession to the WTO; and
   
• Articles 1.2, 1.3 and 3.2 of the Import Licensing Agreement.

In addition, the Russian Federation claimed that the alleged subsidy appears to be inconsistent with:

• Articles 1.1(a)(1)(i), 1.1(a)(1)(ii), 1.1(a)(1)(iii), and 3.1(a) on their own and read together with Annexes I(a), I(f), I(g), and I(1) of the SCM Agreement; and
   
• Articles VI and XVI of the GATT 1994.

On 22 May 2025, the European Union declined the Russian Federation's request to enter into consultations, indicating that such consultations could not be fruitful and could not lead to a mutually satisfactory solution of the matter. The European Union clarified that this was without prejudice to the European Union's rights and participation in any future adjudicative proceedings under the DSU with respect to the matter at issue.

Panel and Appellate Body proceedings

On 10 July 2026, the Russian Federation requested the establishment of a panel. At its meeting on 24 July 2026, the DSB deferred the establishment of the panel.

At its meeting on 25 September 2026, the DSB established a panel. Argentina, Australia, Brazil, Canada, China, Colombia, Ecuador, Iceland, India, Indonesia, Japan, Kazakhstan, Korea, Malaysia, New Zealand, Norway, Paraguay, Saudi Arabia, Singapore, South Africa, Switzerland, Türkiye, Chinese Taipei, Thailand, the United Arab Emirates, the United Kingdom, and the United States reserved their third-party rights.