EU member states yesterday announced the adoption of a mechanism that would bring the bloc’s industrial imports under environmental standards by charging for the carbon emissions linked to their production.
Known as the Carbon Border Adjustment Mechanism (CBAM), the agreement covers industrial imports from the regional bloc’s 27 member states, targeting the highest-polluting products first.
“CBAM will be a crucial pillar of European climate policies,” Mohammed Chahim, a member of the European Parliament from the Netherlands, said in a statement released by the parliament. “It is one of the only mechanisms we have to incentivize our trading partners to decarbonize their manufacturing industry.”
Photo: EPA-EFE
The rules would allow the EU to “apply the ‘polluter pays’ principle to our industry,” Chahim said.
The agreement will initially cover specific products in carbon-intensive sectors, including steel, cement, fertilizers, aluminum, electricity and hydrogen, the European Council said.
Indirect emissions would also be included in the regulation, the council said.
This means that in practice, the importer has to declare the emissions directly linked to the production process, and if these exceed the European standard, acquire an “emission certificate” at the price of carbon dioxide in the EU.
If a carbon market exists in the exporting country, the importer would only pay the difference.
Under the provisional agreement member states came to yesterday, a test period for the agreement is to begin in October, during which importing companies will have to report their carbon emission obligations.
The timetable for the actual implementation of the scheme, which will be gradual, depends on further talks later this week on the rest of the EU’s carbon market reform.
“The new bill will be the first of its kind,” the European Parliament said in a statement, adding that it was designed to comply with WTO rules to push back on accusations of protectionism.
“This mechanism promotes the import of goods by non-EU businesses into the EU which fulfill the high climate standards applicable in the 27 EU member states,” Czech Republic Minister of Industry and Trade Jozef Sikela said. “This will ensure a balanced treatment of such imports and is designed to encourage our partners in the world to join the EU’s climate efforts.”
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