The World Trade Organization has agreed to establish a dispute panel to examine the EU's Carbon Border Adjustment Mechanism (CBAM) and its emissions trading system, following a request from Russia. Russia claims these measures create trade barriers and that free allowances under the ETS act as export subsidies for EU industries. The EU says both are WTO-compliant and will defend them, while a wide range of countries including China, India, and the U.S. have reserved third-party rights, showing the global stakes. The case will test how WTO rules apply to carbon pricing and border adjustments. If the panel rules against the EU, it could reshape how countries design climate trade measures. For businesses and traders, the outcome matters because CBAM will affect import costs for carbon-intensive goods. A ruling could take years, but the process itself signals that carbon border policies are now a central trade issue.
