The institutions of the European Union have reached a provisional agreement at dawn this Tuesday to impose a tax on imports of the most carbon dioxide (CO₂) intensive products that seeks to protect their industry and at the same time promote the international fight against climate change.
This climate tariff - the first of its kind in the world - will begin to be applied gradually from October 2023 and will affect the importation of products such as iron, steel, cement, aluminum, fertilizers;
also electricity and hydrogen.
Europe has had a carbon dioxide emissions trading system, the main greenhouse gas, since 2005.
The EU Emissions Trading Scheme (ETS) obliges some 10,000 energy and industrial facilities on the continent to pay for each ton of CO₂ they emit in their activity.
This market is now in the midst of a reform process and one of the fears expressed by many countries for years refers to the so-called "carbon leakage": the risk of certain industries leaving the EU for any of the countries where they this carbon market does not exist and therefore may be more attractive.
The future Carbon Border Adjustment Mechanism (MAFC) agreed now will be “a key pillar in European environmental policies, since it is one of the few mechanisms we have to encourage our trading partners to decarbonise their manufacturing industry”, has stressed the negotiator of the European Parliament, the Social Democrat Mohammed Chahim, in the talks to close this instrument, which began on Monday and have lasted for more than ten hours.
The agreement, which is based on a Commission proposal, was closed on Tuesday night between the European Parliament and the Governments of the Twenty-seven, represented in the European Council.
Along the same lines, the Czech Minister of Industry, Jozef Sikela, whose country presides over the EU until the end of the year,
The provisional agreement reached by the European institutions —which is still subject to more negotiations on technical aspects that should be closed in the coming days— contemplates that the mechanism will begin to function as of October 2023. In a first phase, it will only entail information obligations on imported products in order to collect the necessary data to apply the rate gradually.
And it is estimated that it will begin to be collected from 2026 or 2027. At the same time, within its borders, Europe will also eliminate the free emission rights that it distributes to some of its industries to avoid this so-called carbon leakage, a measure that is still being In negotiation.
The fringes that remain to be negotiated in the coming days refer precisely to that, to the way in which the free emission rights that some factories receive in order to fully apply the new tariff will end within the community borders, as explained. This Tuesday in a press conference the parliamentarian and president of the Environment Committee of the European Parliament, Pascal Canfin.
As the French MEP has said, three more years will be needed to apply the rate, due to the complexity of this instrument.
Canfin has described the measure as "historic" and has recalled that there is no similar rate in the world.
Based on drafts of the future rate that the commission has produced in recent months, analysts expect imports from Russia, Turkey, China and the UK to be hit hardest in absolute terms.
It cannot be ruled out that the imposition of this mechanism could generate some kind of commercial confrontation.
The EU maintains that its rate will be compatible with the rules of the World Trade Organization and other countries are considering applying similar measures.
The plan to combat climate change that US President Joe Biden presented in the spring of 2021 also outlined the idea of creating a similar border tax.
The antecedent of this mechanism that the EU wants to implement now could be the tax for CO₂ emitted by planes within the borders of the EU and that Europe tried to make all commercial aircraft that land in its territory pay.
That plan generated a harsh confrontation with the US, China and Russia, among other nations, who were opposed to this rate.
The EU, finally, could only apply this system within European territory, which forces companies to resort to the community emission rights trading system (ETS) only when the flights are internal.
After the agreement reached this Tuesday, Mohammed Chahim has insisted in a press conference that this new rate is the best way to "incentivize" the most polluting companies outside the EU to walk towards decarbonization if they want to continue exporting to the market community, one of the most important on the planet.
You can follow CLIMATE AND ENVIRONMENT on
and
, or sign up here to receive
our weekly newsletter
Subscribe to continue reading
Read without limits
Keep reading
I'm already a subscriber