Europe approves the first environmental tariff on the planet: steel and aluminum imports, under the magnifying glass

The European Union approved in the early hours of Monday to Tuesday what is already known as ‘carbon rate’ and what is actually the first environmental tariff on the planet.

The new tool has two goals principal. The first is an environmentalist because he intends to reduce the importation into Europe of products that generate many polluting emissions.

The second one, hidden behind the firstit is a protectionist because it seeks protect European manufacturers of the competition, understands that it is unfair, from its foreign competitors who do not have such demanding environmental standards.

The mechanism is one of the star measures of the European Union decarbonise the industry of the old continent without exposing it to imports from countries with less strict regulations by trying to force those countries to tighten their legislation so that their companies can continue to export to Europe without paying this new tariff.

Avoid “ecological dumping”

European lawmakers believe it will prevent third-country companies from producing “ecological waste” to European ones and who are not tempted to do so relocate your production outside the European Union seeking more lax environmental standards because what they save they will end up paying for in the form of tariffs.

The device, which is officially called Boundary carbon regulation mechanismit will affect imports of steel, aluminum, cement, electricity, fertilizers and hydrogen.

More products looking

From October 2023, companies will have to apply the tariff, even if they will not charge it until its full entry into force in 2026. From 2030, other products that generate polluting emissions will be added, on a proposal from the European Commission and after government approval. during its production. It already indicates plastics or chemicals.

Community sources explain that it could expand into consumer goods and not only to raw materials because, as it is conceived, the proposal already has some holes. A practical example would be cars. Several Mercedes-Benz models coming to the European market they are made in Mexico with Chinese steel.

If Mercedes-Benz imported Chinese steel into Germany, it would pay that carbon tax; if it imports cars made at its plants in Mexico with Chinese steel, it doesn’t pay it.

The deal is historic because It is the first like this in the world. The European Union had spent more than a decade trying to advance the creation of this new instrument, which had clashed with major powers such as the United States and China.

The European institutions consider it it is not a protectionist instrument Rather, it avoids unfair competition, so they hope that if a complaint is made to the World Trade Organization (WTO), it will prove them right.

In a report for the think tank Bruegel, economist André Sapir argues that limiting the carbon tax to a handful of products, the most polluting ones, is a way to avoid incompatibility with WTO regulations and anger and reprisals trading partners such as China. , Brazil, India, Japan, Korea, Mexico or the United States.

The ‘carbon tax’ is part of a set of measures, included in the ‘FIT FOR 55’ package, which bseeks to reduce European polluting emissions by 55% in 2030 compared to 1990 and achieve carbon neutrality in 2050.

The importers will be responsible for tracking for its fulfilment. They will have to buy certificates that cover direct CO2 emissions caused by the products they import in order to have costs comparable to competitors who produce in Europe.

The mechanism specifies that if imported from a country that already has a carbon pricing system, only the difference will be paid. Argentina has it.

The European Commission calculates that it could get up to 14,000 million euros a year for the collection of that carbon tax. This money will in principle fatten the Community budget, so national contributions would be reduced.

Brussels, special

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