Greening industrial imports by charging for the carbon emissions associated with their production; The EU is finalizing the terms of the unprecedented mechanism on Monday, which must also sign off on the end of the agreement.right to pollutefree software dedicated to European producers. With rising CO prices per ton2:the idea is to avoid “ecological wastewhich would allow manufacturers to move their production outside of Europe while encouraging the rest of the world to adopt European standards.
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popular name ofcarbon taxis misleading. it’s not really a tax, butadjustmentwithin (“CBAM:“English”), which consists of applying European carbon market standards to imports where EU producers are obliged to buy.right to pollute“. The importer must declare emissions directly related to the production process and, if they exceed the European standard, obtain “emission certificate» price CO2: in the EU. If the exporting country has a carbon market, it will only pay the difference.
The Commission and the States are advocating a gradual implementation of the mechanism over a period of ten years, starting in 2026. MEPs are calling for a phase-in between 2027 and 2032. Revenue collection could be entrusted to states or a new centralized European authority; Here are some aspects of this system with global impact, which are at the heart of the final negotiations between the European Parliament and the Member States.
Free allowances
The European Commission’s proposal, accepted by the states, targets imports in five sectors considered the most polluting (steel, aluminium, cement, fertiliser, electricity). The European Parliament called to expand the list (hydrogen, plastics, chemicals). According to Brussels, the inclusion of organic chemicals would be too complicated.
Currently, European producers are given free allowances that cover part of their emissions to support their competitiveness against imports that do not meet the same environmental standards. The equivalent of €98.5 billion was thus distributed to them between 2013 and 2021, according to WWF. As a forceborder adjustment“The free allowances distributed to the registered sectors will be phased out.
An important point. by treating imports and local production equally, Brussels believes it is following World Trade Organization (WTO) rules and counters the accusations;protectionism“. But the schedule remains hotly debated. MEPs are calling for a very gradual phase-out, allowing companies to receive 50% of the free allowances in 2030 before they disappear completely in 2032. States want to keep them in place until 2035.
The issue will be resolved only at the end of the week, in the context of other negotiations on the carbon market, warns Pascal Canfin, the chairman of the European Parliament’s environment committee. Environmental non-governmental organizations call for these free quotas, while they exist, to be accompanied by strict conditions in terms of green investments.
Export assistance
Another controversial point. Parliament wants European industrial facilities, under certain conditions, to continue to receive free allowances for their products for export to non-EU countries without comparable carbon pricing. States do not want to do anything.”export discount“. “We have no mechanism to ensure that a company that invests in decarbonisation, which is costly, will not be disadvantaged in the global market.Pascal Canfin claims.
“Without a viable alternative, European exports will suffer from competition“While they are already suffering from energy costs, warns Aegis Europe, which unites about twenty industries (steel, fertilizers, etc.). According to him, such assistance will be compatible with WTO rules. This is denied by Pascal Lamy, the former Director General of the WHO, the head of the Jacques Delors Institute. “This is not compatible because CBAM is not a tax, it is very different from VAT, which we will give exemptions to exporters. It would be very dangerous to risk a lawsuit over this.“, he explained to AFP.
“Indirect” emissions
MEPs want to include emissions”indirect» generated by electricity used to manufacture imported goods. An idea that was initially rejected by the Commission and states that found tracing too difficult. The expected revenues, which could exceed €14 billion a year, will feed into the EU’s overall budget, helping to pay off the post-Covid recovery plan.
NGOs call for them to be strictly reserved for decarbonisation and aid to affected developing countries. By extending European standards to the rest of the world, “However, the goal is to make this device no longer profitable as soon as possible– recalls Pascal Lamy.
Source: Le Figaro
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