The Premise
ESG has mutated. It is no longer about "saving the planet"; it is about Industrial Protectionism. The EU's Carbon Border Adjustment Mechanism (CBAM) is effectively a tariff wall designed to shield European heavy industry from cheaper competitors in India, Turkey, and China. Green is the new camouflage for Trade War.
Intelligence Update: The CBAM Shock
The Mechanism: Starting in 2026, importers into the EU must pay a "carbon price" equivalent to the emissions generated during production.
The Impact: This hits steel, cement, aluminium, and fertiliser hard. Indian steelmakers estimate this will add 20–35% to the cost of their exports to Europe.
The Retaliation: Countries like India and Brazil are challenging this at the WTO as "discriminatory protectionism." It bifurcates the world into "High-Carbon" and "Low-Carbon" trade blocs.
Field Evidence: The Regulatory Moat
India announced plans to challenge the EU CBAM at the World Trade Organisation. Developing nations argue they cannot decarbonise at the same speed as the post-industrial West.
The Lesson: Regulatory alignment is now a prerequisite for market access. If you do not track your carbon, you lose your customer.
Thousands of Porsche and Bentley vehicles were impounded at US ports because a sub-component (a tiny electronic part) breached the Uyghur Forced Labor Prevention Act. It was not the engine; it was a £10 part. But the entire shipment was blocked.
The Lesson: Supply chain visibility must be absolute. "I didn't know" is no longer a legal defence.
The Verdict
The era of "Free Trade" is over. We are in the era of "Managed Trade." If you cannot digitally prove the provenance and carbon intensity of your product, it is effectively contraband in the G7 market.