Europe will tax its imports based on greenhouse gas emissions

Europe will tax its imports based on greenhouse gas emissions

This historic decision is likely to worry American manufacturers, who fear it will create a new tangle of red tape for exporting to Europe.

The European Union has reached an agreement to impose a import tax based on the greenhouse gases emitted to manufacture themintroducing for the first time the regulation of climate change in the rules of world trade.

The agreement reached between European national governments and the European Parliament ends more than a year of negotiations on the details of the plan. The European Union is expected to formally adopt it in the coming weeks as part of a sweeping legislative package that will step up the bloc’s efforts to limit global warming.

The plan aims to protect European automakers from competitors from countries that have failed to regulate carbon dioxide emissions. He would also use the bloc’s economic clout to pressure countries to put a price on carbon, either through a tax or other means such as a cap and limit system. exchange ; manufacturers from these countries would benefit from a deduction of this cost of the tax when their goods reach European borders.

Money is a sticking point in global climate change negotiations.

The plan, known as carbon boundary adjustment mechanism, has angered the European Union’s trading partners, particularly in developing countries, where manufacturers typically emit relatively large amounts of carbon dioxide. It has also unsettled US manufacturers, who fear the move will create a new web of red tape for exporting to Europe.

tax would first apply to some of Europe’s most energy-intensive industries: aluminium, steel, fertilizers, cement, certain chemicals and hydrogen production, which is expected to grow rapidly in the coming years. It would come into force in October 2023, initially only as an obligation to report greenhouse gas emissions associated with imports.

In subsequent years, importers would be required to pay the tax. The step would accompany the European Union’s timetable for phasing out the free allowances the bloc grants to its industries under its cap and trade system.

With this directive, those who pollute will really pay.

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