Russia appeals to WTO to resolve dispute over EU carbon regulations

Russia appeals to WTO to resolve dispute over EU carbon regulations The panel established in response to the request must assess the consistency of CBAM with WTO agreement rulesMOSCOW, July 16. /TASS/. Moscow has requested the World Trade Organization (WTO) to establish a panel to resolve a dispute regarding the European Union’s Carbon Border Adjustment Mechanism (CBAM), the Russian Economic Development Ministry’s press service reported. The panel established in response to the request must assess the consistency of CBAM with WTO agreement rules, according to the report. "Russia considers CBAM a discriminatory instrument used by the EU to unjustifiably restrict access to its market for competitive imports. Moreover, CBAM exemplifies the EU’s misuse of the green agenda to create artificial competitive advantages for EU producers," the ministry said. Earlier, the EU declared its intention to soften CBAM and mitigate its potential negative impact on foreign producers. However, the legal acts adopted in late 2025 and early 2026, which amend the basic EU CBAM regulation and implement various elements of the mechanism, not only failed to remedy the EU’s significant breaches of its international obligations but, in several respects, exacerbated the conflict between its regulations and WTO law. CBAM violates a number of fundamental rules of the WTO’s General Agreement on Tariffs and Trade (GATT), including most-favored-nation treatment, the level of binding of customs duties and other charges, the prohibition on quantitative import restrictions, national treatment, transparency, as well as agreements on import licensing procedures, the Russian Economic Development MInistry noted. Despite EU sanctions, CBAM affects the interests of Russian producers, including in third-country markets, because it applies to the entire production chain of relevant goods, the ministry added. The mechanism for granting additional free emission allowances to specific EU industries deemed by the European Union to be at risk of so-called carbon leakage, under the EU Emissions Trading System constitutes a prohibited subsidy within the meaning of the WTO Agreement on Subsidies and Countervailing Measures, the ministry believes. 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