WTO creates panel to settle EU-Russia dispute over CBAM environmental mechanism

The Dispute Settlement Body of the World Trade Organization (WTO) agreed on Friday to create a panel to settle a dispute between Russia and the European Union over the Carbon Border Adjustment Mechanism (CBAM) established by the EU.

Russia requested bilateral consultations with the EU on this case in May 2025, although the Twenty-seven refused to participate in them due to Russia’s invasion of Ukraine.
According to Russia, the CBAM creates significant trade barriers for products imported by the EU and is incompatible with Brussels’ WTO obligations.
In its view, the allocation of allowances by the EU to certain European companies in the Emissions Trading System constitutes a de facto export subsidy, aimed at strengthening the competitiveness of some of its domestic industries.

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