The Australian government is considering a new measure to prevent carbon leakage. A review published on February 13 proposes introducing a cross-border carbon adjustment mechanism, initially targeting cement and clinker imports, with potential expansion to steel, hydrogen, and ammonia.

Currently, the country's Safeguard Mechanism covers approximately 220 heavy industrial sites, which are responsible for roughly 30% of national emissions. While officials state that these regulations are effective for the time being, they may require additional support in the future.

The reasoning is straightforward: target goods that Australia both manufactures and imports, where the risk of leakage is highest. Clinker tops that list—imports could increase by 14% by 2030 under worst-case scenarios—followed by lime and cement. Steel is more complicated. Melbourne-based BlueScope warned in 2023 that mishandling this issue could devastate domestic production entirely. Therefore, the review recommends testing specific steel products first before implementing any broader measures.

Export rebates received a firm rejection; they would conflict with Australia's emissions reduction goals. Meanwhile, Europe's carbon border adjustment mechanism is expected to generate an additional €500 million in revenue by 2030, representing a 23% increase.