MEPs have proposed to apply a price on the CO2 emissions of some goods imported into the EU, if they come from countries with less ambitious climate standards. This would create a global level playing field, as well as an incentive for European and non-European industries to decarbonise, in line with the objectives of the Paris Agreement.
On Wednesday 10 March the European Parliament adopted a resolution proposing the introduction of a Carbon Border Adjustment Mechanism (CBAM ) compatible with the WTO. The resolution stresses that the EU’s increased ambition on climate change must not lead to “carbon leakage” , ie the flight abroad of EU companies. Indeed, global climate efforts would not benefit if EU production were simply shifted to third countries that have less ambitious emissions rules.
The text was approved with 444 votes in favor, 70 against and 181 abstentions.
MEPs proposed to apply a price on the CO2 emissions of some goods imported into the EU, if they come from countries with less ambitious climate standards. This would create a global level playing field, as well as an incentive for European and non-European industries to decarbonise, in line with the objectives of the Paris Agreement.
The import duty should be WTO compatible and not misused as a tool to strengthen protectionism , explains Brussels. It must be specifically designed to meet climate goals. The revenue generated should, MEPs propose, be used as part of own resources to increase support for Green Deal objectives in the EU budget.
Now the ball goes to the European Commission which is expected to present a legislative proposal on CBAM in the second quarter of 2021 as part of the European Green Deal , as well as a proposal on how to include the revenues generated to finance part of the EU budget.
The Mechanism must link to the EU Emissions Trading System (ETS)
The new mechanism should be part of a broader EU industrial strategy covering all imports of products and raw materials under the ETS. At an early stage, already by 2023, the energy sector and energy-intensive industrial sectors , such as cement, steel, aluminum, oil refining, paper, glass, chemicals should be covered. and fertilizers, which continue to benefit from substantial free allowances and still represent 94% of industrial emissions in the EU.
Setting the CBAM tariff at the same value as the EU quotas under the ETS is a strategy that will work better than current measures, which give free CO2 quotas to certain sectors to combat carbon offshoring, MEPs always say. .
After the vote, rapporteur Yannick Jadot (Greens / ALE, FR) said: “ CBAM is a great opportunity to reconcile climate, industry, employment, resilience, sovereignty and relocation issues . We must stop being naive and we must impose the same price on the emissions of all products, whether they are produced in the EU or not, to ensure that even the most polluting sectors participate in the fight against climate change and innovate towards zero carbon. This is our best chance to stay below the 1.5 ° C limit for global warming, also pushing our trading partners to be equally ambitious to enter the EU market ”.
To review the debate in Plenary, click here .
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