The European Parliament and EU Member States have agreed to adopt an unprecedented mechanism to make industrial imports greener, reports “France Press”.
This is expected to be done through the payment of a tax for the carbon emissions associated with the production.
The decision was reached after a long night of negotiations, which concluded early this morning.
This mechanism, unprecedented in its scale, called “carbon border tax”, United Statesit is applied to imports from the 27 Member States according to the criteria of the European carbon market, according to which EU entrepreneurs must buy “pollution rights”.
The European institutions indicate this the mechanism covers the sectors that pollute the environment the most – steel, aluminum, cement, fertilizers, electricity, but also hydrogen.
When the price of a ton of carbon dioxide rises the idea is to avoid “environmental dumping”causing companies to move production outside Europe, encouraging the rest of the world to adopt European standards.
According to MEP Mohamed Chahim, negotiator on behalf of the EP, the “carbon border adjustment mechanism will be a key pillar of European climate policy”. He stressed that this is one of the mechanisms to encourage EU trading partners to decarbonise their industries.
In practice, the importer must declare the emissions directly related to the production process and, if they exceed the European standard, buy an “emission certificate” at the EU carbon price. In case there is a carbon market in the exporting country, only the difference will be paid.
According to the agreement, the mechanism will take into account “indirect” emissions, ie generated from the electricity used to produce the imported products.
It is expected from October 2023 to start a trial period, during which the importing companies only have to account for their obligations.
The timetable for the mechanism’s actual entry into force will depend on further talks later this week on the rest of the EU’s carbon market reform, which is at the heart of the European climate plan.
MEPs call for free allowances to be phased out starting in 2027, before being completely phased out in 2032, when the carbon tax mechanism will come into full force. EU countries are in favor their phasing out between 2026 and 2035.