Russia Challenges EU CBAM at the WTO

According to reports on October 7, the EU’s Carbon Border Adjustment Mechanism (CBAM) has entered a new phase of scrutiny; amidst the ongoing conflict between Russia and the EU, a World Trade Organization (WTO) panel was established on September 25. This dispute—initiated in May 2025—places the design and implementation of the CBAM, as well as aspects of the EU Emissions Trading System (ETS), under WTO review. The implications extend beyond the Russia-EU conflict and could impact the aluminum trade. Should the panel find that certain aspects of the CBAM or the EU ETS are inconsistent with WTO obligations, the outcome could influence the design of similar carbon border measures elsewhere; conversely, if the EU successfully defends its policies, it might bolster the scope for nations to adopt unilateral border adjustments as part of their climate strategies, thereby incentivizing low-carbon aluminum production and the use of trade protection measures for aluminum scrap. The WTO challenge could also subject Europe’s efforts to protect and decarbonize its domestic aluminum production base to further scrutiny.