Carbon pricing is a common and constantly changing policy tool with the goal of stimulating the re duction of carbon dioxide emissions and the transition to cleaner technologies. The combination of a carbon tax and the new Carbon Border Adjustment Mechanism (CBAM) is causing price effects in the EU. There is currently a lack of research using the latest high-granularity data to identify price effects by country and sector in the EU. Additionally, only a few methodologies exist to validate and enhance models of current carbon policy price effects. This thesis estimates the price effects of carbon taxation across EU sectors and countries using 2021 FIGARO data with high sector granularity. Using traditional input-output modelling the tax was first applied to value-added- the standard method- and subsequently the approach of taxing intermediate sales was explored. The results from the value-added method were extended to estimate changes in trade flows and subsequently placed into the context of the broader political economy. Additionally, the outcomes from the intermediate sales method were compared to those from the value-added method. This showed that the EU will experience an ave age price increase of 1.26%, and CBAM changes a competitive disadvantage from -0.98% to a 1.46% competitive advantage. It is therefore seen that price increases remain moderate, and CBAM achieves its goal of protecting the EU’s competitiveness. However, for a carbon tax and CBAM to be fully effective in stimulating a transition to cleaner technologies, they should be implemented in combination with subsidies, investment in markets and infrastructure, as well as effective dissemination of research and development. The model was limited to examining the effects within the EU, and more research is needed to expand it to understand the impacts on trade partners. Additionally, further analysis is needed to understand the mechanics of the tax on intermediate sales method