This is the final report of the carbon leakage review undertaken between July 2023 and March 2025. The review assessed the risk of carbon leakage of Australia's traded products. Carbon leakage occurs when domestic production moves to countries with weaker climate policies. This can lead to emissions increasing overseas.

The review also assessed potential measures to mitigate this risk and considered whether additional policies are needed. It found existing policy measures mitigate leakage risks in the short to medium term.

The review recommended that a border carbon adjustment be introduced for a select group of commodities that are at particular risk of carbon leakage from imports, with it initially covering cement and clinker, and to be considered for other commodities subject to further assessment.

The report is provided with an annex.