The act of balancing the liberalization of trade and the interest for environmental consideration might be more crucial now than ever. Many countries are taking efforts in mitigating emissions of green-house-gas by reducing the risk of carbon leakage. A recent proposal on a carbon border adjustment mechanic (CBAM) from the EU seeks this ambition. This thesis questions whether CBAM is compliant with The General Agreement on Tariffs and Trade 1994 (GATT) of the WTO. To present an answer to the question, I will introduce the relevant GATT provisions which regulates the prohibitions of trade-restrictive measures applied in international trade. The analysis of the provisions suggests that CBAM is a discriminatory trade restrictive measure with respect to the principles of National Treatment and Most Favoured Nation. However, it is discovered that EU can be exempted from its GATT obligations as they have the possibility to conform with the General Exception of the GATT.