European Union adopts tax to offset carbon emitted by imported products

To enter Europe, imported products will now have to pay for the carbon emitted during their production. This is a tax principle that was approved earlier this Tuesday (13) during negotiations between the European Parliament, the European Commission and bloc members.

This decision, which has been debated in the EU since the 1990s, is what some call revolutionary. The official name of the tax will be “Carbon Regulation Mechanism at Borders” and import of iron, steel, cement, aluminum, fertilizer, electricity and hydrogenIn addition to some goods such as screws and nuts????????

In Europe, the carbon emissions quota system requires companies to pay for “pollution rights”. But now, for imports to the bloc countries, it will also have to be paid for the CO2 emitted, by purchasing an “emissions certificate” to bring it in line with the price of the respective licenses in the EU.

An unprecedented mechanism aims to put European industry on an equal footing with foreign competitors. The EU also hopes that the measure will deter factories moving out of the bloc and bring more profits to European countries.

“The Carbon Limit Adjustment Mechanism will be a very important pillar of European climate policies. It is one of the only mechanisms by which we have to encourage our business partners to ‘decarbonise’ their manufacturing industries,” said Mohammed Chahim, MEP rapporteur of the text. Statement by the European Parliament.

pay for pollution

Steel produced in China will have to pay for the carbon released during extraction, then the emissions from the factory, and then the power plant that feeds the factory.

This “carbon cost” will be determined on imports into the EU of products currently considered the most polluting.

But the list of raw materials and goods has not yet grown: Brussels aims to examine, for example, a possible extension of the measure to polymers (plastics).

According to Pascal Canfin (Renew, liberals), chairman of the European Parliament Environment Committee, the measure will reduce the incentive to transfer European factories to other countries, as the mechanism must match the prices of imported products with those of Europeans.

“The message for our industries is clear: there is no need to go to other countries as we take the necessary measures to prevent unfair competition by guaranteeing fair treatment to European manufacturers and imported goods,” he said.

Another important development in the negotiations is that the amount obtained with this tax will be sent directly to the EU’s coffers. The tax is expected to generate revenues of approximately 14 billion euros.

The measure will enter into force with a transitional period from 1 October 2023, during which importers will be required to declare emissions related to the production of imported goods.

The deadline for the implementation of the tax will be set this weekend: negotiations on a more comprehensive reform of the carbon market are underway in the EU.