{"id":3502155,"date":"2022-12-15T10:15:28","date_gmt":"2022-12-15T09:15:28","guid":{"rendered":"https:\/\/www.globalfactor.com\/?p=3502155"},"modified":"2022-12-15T10:22:04","modified_gmt":"2022-12-15T09:22:04","slug":"eu-seals-agreement-on-worlds-first-carbon-tariff","status":"publish","type":"post","link":"https:\/\/www.globalfactor.com\/en\/eu-seals-agreement-on-worlds-first-carbon-tariff\/","title":{"rendered":"EU seals agreement on world\u2019s first carbon tariff"},"content":{"rendered":"

EU negotiators reached an agreement early on Tuesday morning (13 December) that will pave the way for Europe to set up the world\u2019s first levy on carbon-intensive goods entering its market.<\/p>\n

The so-called carbon border adjustment mechanism (CBAM) will mirror the EU\u2019s own domestic carbon price, thereby shielding European industry from cheaper, more-polluting products imported from abroad.<\/p>\n

It will initially apply to imports including iron and steel, cement, aluminium, fertilisers and electricity as well as hydrogen.<\/p>\n

The agreement was sealed the day after the G7 group of industrialised nations announced the creation of an \u201cinternational climate club\u201d, aimed at fostering greener industry.<\/p>\n

\u201cFor the first time, we will ensure fair treatment for our enterprises, which pay a carbon price in Europe, and their foreign competitors, who do not,\u201d said Pascal Canfin, the chairman of the European Parliament\u2019s environment committee.<\/p>\n

\u201cThis is a major step that will allow us to do more for the climate while protecting our businesses and our jobs,\u201d he said in a statement.<\/p>\n

Scope expanded to hydrogen<\/b><\/p>\n

Jozef S\u00edkela, industry and trade minister for the Czech Republic, which ran negotiations on behalf of the 27 EU member states also welcomed the deal as a key part of European climate action.<\/p>\n

\u201cThis 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,\u201d he said. \u201cThis will ensure a balanced treatment of such imports and is designed to encourage our partners in the world to join the EU\u2019s climate efforts,\u201d he affirmed.<\/p>\n

The levy will be launched on 1 October 2023 for a test period that imposes only reporting obligations on the imports of goods covered by the scheme. After this transition period, the full levy will kick in.<\/p>\n

However, the end of the test phase is yet to be decided and will be discussed in further negotiations at the end of the week.<\/p>\n

The levy will cover imports of iron and steel, cement, aluminium, fertilisers and electricity, in line with the European Commission\u2019s initial proposal tabled in July 2021. Following Tuesday\u2019s agreement, it will also cover hydrogen, indirect emissions under certain conditions and some downstream products.<\/p>\n

Any companies importing these into the EU will have to buy certificates to cover the carbon emissions embedded in them unless they can prove they have already been accounted for by climate legislation in the producer country.<\/p>\n

Over time, the levy will replace the much-criticised allowances that EU industries currently receive for free under the bloc\u2019s carbon market, the Emissions Trading Scheme (ETS).<\/p>\n

\u201cIt is an alternative to our current carbon leakage measures, which will allow us to apply the polluter pays principle to our own industry,\u201d said Chahim.<\/p>\n

Downstream products<\/b><\/p>\n

In the negotiations, the European Parliament pushed to expand the number of sectors covered by the levy beyond what the European Commission had suggested in 2021.<\/p>\n

Lawmakers succeeded in including hydrogen, which is mainly produced from coal in non-EU countries, according to a November paper from the EU executive that assessed the possibility of including more sectors.<\/p>\n

The paper said that, while imports of hydrogen are currently quite low, they are foreseen to grow in the coming years and that \u201cthe introduction of hydrogen appears less complex than the inclusion of other sectors under consideration for an extension\u201d.<\/p>\n

The European Parliament also succeeded in including processed products, such as screws and bolts and similar articles made from iron or steel.<\/p>\n

Other downstream products could be added following a review carried out before the end of the transition period. The inclusion of organic chemicals and plastics will also be assessed before the end of the transition period.<\/p>\n

Alongside these, the European Parliament wanted to include indirect emissions \u2013 those caused by the production of the energy used in the manufacturing process.<\/p>\n

This proved a major sticking point in the final, 10-hour negotiation. In the end, indirect emissions will be included \u201cunder certain circumstances\u201d, with more work required to finalise the details.<\/p>\n

Exports and phase-out date left blank<\/b><\/p>\n

Two of the major elements of the levy remain undecided. These are the timeline for when the levy comes into force and whether to compensate EU exports, which won\u2019t be protected by the tariff.<\/p>\n

Both of these will be discussed in a \u201cjumbo\u201d round of negotiations later this week as part of talks to reform the EU carbon market.<\/p>\n

Meanwhile, the industry is pushing hard for a gradual phase out of free allowances and support for exports, warning that without this, the levy will fail to prevent businesses relocating out of the EU.<\/p>\n

Source:<\/b> Euractiv<\/p>\n<\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

Climate Change News<\/p>\n","protected":false},"author":1,"featured_media":3498429,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[89,88],"tags":[],"class_list":["post-3502155","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily","category-news"],"yoast_head":"\nEU seals agreement on world\u2019s first carbon tariff - Global Factor<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.globalfactor.com\/en\/eu-seals-agreement-on-worlds-first-carbon-tariff\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EU seals agreement on world\u2019s first carbon tariff - Global Factor\" \/>\n<meta property=\"og:description\" content=\"Climate Change News\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.globalfactor.com\/en\/eu-seals-agreement-on-worlds-first-carbon-tariff\/\" \/>\n<meta property=\"og:site_name\" content=\"Global Factor\" \/>\n<meta property=\"article:published_time\" content=\"2022-12-15T09:15:28+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-15T09:22:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.globalfactor.com\/wp-content\/uploads\/2022\/07\/pexels-anna-pechuro-11544374-scaled-e1657270394345.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2048\" \/>\n\t<meta property=\"og:image:height\" content=\"2560\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"globalfactor.com\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@global_factor\" \/>\n<meta name=\"twitter:site\" content=\"@global_factor\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"globalfactor.com\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"EU seals agreement on world\u2019s first carbon tariff - 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