The first phase of the European Union’s Carbon Border Adjustment Mechanism has taken effect. The new rules aim to ensure EU businesses are not disadvantaged by the bloc’s ambitious decarbonization efforts.

On Tuesday, the Council of the European Union supported a “general approach” to advance a proposed EU carbon border adjustment mechanism to a vote in the European Parliament. The Council’s vote backs the proposed regulation’s framework, but leaves some details to further deliberation.

If implemented, EU carbon border adjustments would place a duty on imports from jurisdictions lacking a sufficient price on carbon emissions. This would protect European industries subject to the bloc’s carbon pricing system from competition with producers in countries with weaker environmental laws, as well as ‘leakage’, wherein businesses relocate operations to environmentally lax jurisdictions to increase cost competitiveness (i.e., ‘offshoring pollution’).