The member states of the EU (European Union) and the European Parliament announced this Tuesday (13) an unprecedented mechanism to obtain “green” industrial imports in Europe, with a tax on carbon emissions linked to their production.
It is a decision that some call revolutionary, as the idea has been discussed in the EU since the 1990s. The tax will officially be called the “Carbon Adjustment Mechanism at the Borders” and will be applied to imports of iron, steel, cement , aluminum, fertilizers, as well as electricity and hydrogen, as well as some commodities 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’s countries, it will also be necessary to pay for the carbon emitted, buying an emission certificate to align with the price of the corresponding licenses in the EU.
Unprecedented, the mechanism intends to put European industry on an equal footing with foreign competitors. The EU also hopes that the measure will discourage the transfer of factories outside the bloc and bring more profits to European countries.
“The Carbon Border Adjustment Mechanism will be a crucial pillar of European climate policies. It is one of the only mechanisms we have to incite our business partners to ‘decarbonize’ their manufacturing industry”, said Mohammed Chahim, deputy rapporteur of the text, quoted in a statement from the European Parliament.
pay for pollution
Steel produced in China will have to pay for the carbon emitted during extraction, then for emissions in the factory and then for the power plant that feeds the factory.
This cost will be determined on imports into the EU of products currently considered to be the most polluting. However, the list of raw materials and goods is yet to grow: Brussels intends to study, for example, a possible extension of the measure to polymers (plastic).
According to Pascal Canfin, president of the Environment Committee of the European Parliament, the measure will reduce the incentive to transfer European factories to other countries, since the mechanism should equate the prices of imported products to those of Europeans.
“The message for our industries is clear: there is no need to go to other countries because we have taken the necessary measures to avoid unfair competition, guaranteeing fair treatment to European producers and imported goods”, he said.
Another significant advance in the negotiations is that the amount acquired with this tax will be sent directly to the EU’s coffers. The tax is expected to generate around 14 billion euros (R$ 78.4 billion) in revenue.
The measure will come into effect from October 1, 2023, with a transition period during which importers will be required to declare emissions related to the production of the imported goods.
The final date for the tax’s application will be decided this weekend as negotiations on a more comprehensive reform of the EU carbon market continue.
With AFP
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