EU plans world’s first carbon border tax angers trading partners


The EU’s proposal to impose a carbon border tax in response to climate change has triggered strong reactions from trading partners led by Russia, while other countries are considering adjusting their climate policies in response.

The plan to introduce the world’s first major climate import tariffs by 2026 will pass the so-called cost of carbon emissions Carbon boundary adjustment mechanism (CBAM).

It will impose a tax linked to the price of carbon on imported steel, aluminum, fertilizer and cement.

Economists believe that the EU’s measures, Announced on WednesdayAs a key test case, it is closely watching whether it can successfully incentivize reductions in emissions and prompt other countries to follow the example of Brussels.

Among the major trading partners of the EU, Russia has criticized the proposal and calculated that it may lose US$7.6 billion as a result, which makes Moscow one of the biggest losers of these measures.

It is Europe’s largest supplier of carbon-intensive products such as oil, coal, rolled steel and aluminum, with an estimated value of 10 billion euros in 2019. In 2019, the EU’s imports from Russia totaled 145 billion euros, making Moscow the EU’s largest supplier. Largest trading partner, And Russia is the fifth largest trading partner of the European Union.

President Putin’s spokesperson Dmitry Peskov told the Financial Times: “The prospect of our economy and our companies facing additional financial burdens is very unpleasant.”

“This is an environmental policy tool, not a tax, nor a tariff”-EU Economic Commissioner Paolo Gentiloni © AFP via Getty Images

EU leaders stated that the policy is aimed at companies rather than countries, and emphasized that they want to cooperate as broadly as possible with other governments on carbon pricing.

“This is an environmental policy tool, not a tax, nor a tariff. It complies with and complies with international trade rules,” said Paolo Gentiloni, EU Economic Commissioner.

Trade secrets

The British “Financial Times” revised “Trade Secrets”, which is its must-read daily newsletter on the changing face of international trade and globalization.

Register here Learn which countries, companies, and technologies are shaping the new global economy.

Gentiloni said that the G20 finance ministers who met in Venice earlier this month have received the carbon boundary proposal “actively”. However, he acknowledged that “there is a lot of attention, curiosity and worries about this decision on a global scale.”

As the EU prepares to become the world’s first group to tax carbon-intensive goods at its borders, some allies seem to be following suit.

Democrats of America this week promote Carbon border tax, even if the country lacks a national carbon pricing mechanism. Canada is also discussing this initiative.

The chart shows that climate events focus on the price of carbon pollution

Peskov said that Russia is keen to discuss this issue directly with the EU, but after some member states rejected the proposals of France and Germany, there is little hope of doing so. Summit proposal With Putin, he added.

“The conversation basically collapsed [ . . .] But issues like decarbonization make it vital to resume dialogue because we need to discuss it,” Peskov said.

Sir Dieter Helm, an energy economist and a well-known advocate of carbon pricing, said that lobbying from exporting countries such as China and Russia is inevitable, which shows how powerful CBAM can be as a tool to induce other countries to adopt it. Carbon pricing.

“Anyone can get a CBAM exemption if they have the same [carbon price] At home,” he said. “So anyone who wants to expand carbon pricing can join the voluntary alliance. “

The carbon boundary proposal is “the most important part of all parts so far” [green recovery] Package”, Helm added, referring to 13 proposals The European Commission announced the news this week.

China has also been opposed to the EU’s carbon border tax, but it is also taking measures to introduce carbon pricing. This week roll out National Emissions Trading Scheme for the energy sector.

EU proposals still need to be negotiated in Brussels for many years before they become law, and although unlike other parts of the green legislative agenda, they have broad support from European industry leaders who believe that taxation is a means of fending off foreign competitors.

In addition to Russia, the countries most affected by carbon tariffs include Turkey (accounting for one-third of European cement imports and 12% of steel) and China (accounting for 14% of steel imports).

Additional report by Ayla Jean Yackley

Follow @climate On Instagram

Climate capital

Where climate change meets business, markets, and politics. Explore the British Financial Times report here.

Are you curious about the environmental sustainability commitment of the Financial Times? Learn more about our science-based goals here





Source link

admin

Leave a Reply

Your email address will not be published. Required fields are marked *