The European Union (EU) aims to reduce greenhouse gas (GHG) emissions by 55% by 2030 and achieve climate neutrality by 2050, in line with the Paris Agreement. The European Green Deal (2019) and the Fit for 55 package (2021) set legislative reforms to achieve these targets. A key element is the EU Emission Trading System (EU ETS), operating since 2005. However, increasing GHG emissions from imports prompted the adoption of the Carbon Border Adjustment Mechanism (CBAM) to address carbon leakage and level the playing field between domestic producers (paying ETS allowances) and importers (buying CBAM certificates). The CBAM is a tariff with environmental purpose and acts as an European CO2 tax, requiring importers to pay a carbon price equivalent to the EU’s internal carbon price and encouraging CO2 emission reductions. It is an equalizing system protecting EU producers and promote global adoption of green technologies. This study examines CBAM from public finance and financial law perspective, assessing its impact on global trade flows, the economic regulatory role of customs and CBAM and its impact on public revenue. The study focuses on the economies most exposed to the CBAM and the redistribution opportunities arising from ETS and CBAM system. It evaluates CBAM’s legal framework, compatibility with tax regulations, its implementation by Member States (with a case study of Hungary) and potential international disputes and adherence to World Trade Organization (WTO) rules. For Hungary, CBAM strengthens climate strategy and competitiveness in global markets. The study highlights the need for a robust legal and regulatory framework to ensure effective CBAM implementation while minimizing negative impacts. It calls for further research and international cooperation to develop comprehensive guidelines for CBAM integration into national and global policies.