The EU has agreed to legislate for a green tariff on imports, to be levied on goods, including steel and iron, that are produced with high carbon dioxide emissions.
According to a report in The Guardian, once the tariff–formally known as a carbon border adjustment mechanism (CBAM) is effective, countries which fail to green their industries will face taxing. The EU’s hope is that CBAMs will deter countries that have previously profited from high-carbon activities, and force them to decarbonize. While the agreement is still provisional, the EU has announced that if discussions are successful, CBAMs will be initiated on a ‘trial basis’ from October 2023. Initially, no financial penalties will be struck, companies will only be required to ‘report on the emissions associated with the production of the goods they wish to sell’.
The system will be applied at first to iron and steel, cement, fertilisers, aluminium, electricity, hydrogen and chemical industries.
''This mechanism promotes the import of goods by non-EU businesses into the EU which fulfil the high climate standards applicable in the 27 EU member states.''
Jozef Síkela, minister of industry and trade of the Czech Republic
Jozef Síkela, minister of industry and trade of the Czech Republic, who led the negotiations in the EU parliament, said: “The carbon border adjustment mechanism is a key part of our climate action. This mechanism promotes the import of goods by non-EU businesses into the EU which fulfil the high climate standards applicable in the 27 EU member states. This will ensure a balanced treatment of such imports and is designed to encourage our partners in the world to join the EU’s climate efforts.”
Source: The Guardian