Core Viewpoint - Russia has formally requested consultations with the EU and WTO regarding the EU's Carbon Border Adjustment Mechanism (CBAM) and the EU Emissions Trading System (EU ETS), arguing that these measures are trade-restrictive and discriminatory under the guise of climate policy [1][5][9]. Group 1: CBAM and EU ETS Overview - The EU established the EU ETS in October 2003 to address "carbon leakage," which refers to the transfer of production to countries with less stringent emissions regulations [4]. - In May 2023, the EU passed regulations to establish CBAM, which aims to provide additional support measures for sectors at risk of carbon leakage [5][9]. Group 2: Russia's Concerns - Russia claims that the CBAM imposes complex and costly trade barriers on EU imports, creating significant uncertainty and unpredictability for operators [5][6]. - The application process for CBAM requires extensive documentation and proof of financial and operational capacity from importers, increasing compliance costs [6][8]. - Russia argues that the CBAM effectively acts as an additional "quasi-tariff" on imports from third countries, diverting financial resources from these countries' domestic climate change efforts [8][9]. Group 3: Economic Implications - The CBAM is expected to increase the trading costs of regulated goods significantly due to the administrative and compliance burdens imposed [6][9]. - The EU's CBAM currently applies to industries such as cement, steel, aluminum, fertilizers, electricity, and hydrogen, which are identified as having high carbon leakage risks [9]. - The EU estimates that these sectors will account for over 50% of emissions covered by the EU ETS once fully implemented, aiming to encourage production countries to reduce carbon emissions [9].