EU’s Drastic Reforms Want to Levy Import Carbon Tax, Steel And Cement are All Included
The central bank has rarely made a move, and it has restarted the increase in the foreign exchange deposit reserve ratio after 14 years. T
According to reports, the European Union (EU) is planning to let importers of steel, cement and aluminum “pay” for greenhouse gas emissions. This is in line with the carbon tax that related local producers in the EU have begun to implement. The system is similar.
According to a Bloomberg report quoting a person familiar with the matter, the European Commission hopes to introduce a system to charge for the emissions incidental to some imported goods. In addition to the above-mentioned goods, it also includes fertilizers and electricity. This is an action to address climate change initiated by no other country in the world so far.
The person, who asked not to be named, added that the proposal will be announced next month. At that time, importers will have to purchase special certificates at a price linked to the EU Emissions Trading System. This so-called carbon border adjustment mechanism is designed to ensure that European companies have a level playing field while European companies are tightening emissions restrictions.
The measures in this plan are part of a broader package proposed on July 14 to align the EU economy with stricter emission reduction targets in 2030. The 27-nation European Union is strengthening its environmental regulations, which will affect everything from transportation to energy production and trade. The primary goal of the Green Agreement is that by the middle of this century, Europe will become the world’s first carbon-neutral continent.
According to a draft proposal, the European Commission is considering a transition period of up to three years before the mechanism becomes fully effective in January 2026. The proposal stated that between 2023 and 2026, it could use a simplified system, “the purpose is to reduce the risk of destructive effects on trade flows and reduce the initial administrative burden on the applicant.”
According to the draft EU regulations, importers in affected industries will be required to purchase electronic emission certificates at prices corresponding to the EU emissions trading system. The EU Emissions Trading System is the world’s largest greenhouse gas emission limit and trading scheme. Each CBAM (Carbon Boundary Adjustment Mechanism) certificate will correspond to 1 metric ton of emissions contained in imported goods.