This chapter explores the interaction between trade governance and environmental governance in achieving global carbon neutrality goals, focusing on the Carbon Border Adjustment Mechanism (CBAM). It examines the tension between the principle of trade liberalization and the strengthening of environmental regulations within the framework of WTO norms, and analyzes the institutional background and significance of CBAM. CBAM is discussed as a mechanism that not only prevents carbon leakage but also promotes the convergence of global carbon pricing systems and drives decarbonization innovation. Using Korea as a case study, the chapter reviews the establishment of institutional frameworks through the 2020 carbon neutrality declaration and the enactment of the Carbon Neutrality Framework Act. It analyzes how the Korean government and industries have strengthened their sector-specific strategies and carbon management systems after the introduction of CBAM. Particular attention is given to POSCO’s response, including the development of hydrogen-based steelmaking technology and the shift toward Environmental, Social, and Governance (ESG) management. Finally, the chapter examines how the emergence of the Trump administration’s second term and the rise of protectionism may constrain the international diffusion of carbon neutrality norms led by the EU.