EU carbon tariff could be imposed in 2025

EU carbon tariff could be imposed in 2025

The text of the Carbon Border Adjustment Mechanism (CBAM) bill has been voted on by the Environment, Public Health and Food Safety Committee (ENVI) of the European Parliament. Some experts told Yicai.com today (18th) that this plan is more radical than the plan proposed by the European Commission in July last year, so it may be necessary to re-evaluate the impact on China’s exports.

On the 15th of this month, Huang Runqiu, Minister of Ecology and Environment, chaired a high-level meeting of the BRICS countries on addressing climate change. The meeting issued a joint statement saying that it opposes any use of the climate agenda to restrict trade and investment, set up new green trade barriers, such as imposing A carbon border adjustment mechanism that violates the multilateral rules of the World Trade Organization.

European Parliament final plan may take shape soon

On the morning of the 18th, Wu Bixuan, a specially invited researcher of the China Carbon Neutrality 50 Forum and a senior partner of the Haihua Yongtai (Beijing) Law Firm, told Yicai.com, “On the afternoon of May 17th local time, the European Parliament’s environmental and public health issues and the Food Safety Committee voted to approve the text of the Carbon Border Adjustment Mechanism Act.”

According to a press release checked by a Yicai reporter on the official website of the European Parliament, “On Tuesday, the Committee on Environment, Public Health and Food Safety approved the establishment of a carbon border with 49 votes in favor, 33 votes against and 5 abstentions. Regulatory reporting on regulatory mechanisms.”

“Judging from the limited information currently available, compared with the carbon tariff plan proposed by the European Commission in July last year, the plan passed by the European Parliament’s Environment Committee has undergone major changes.” Wu Bixuan said that the changes are mainly reflected in: starting the tariff plan one year ahead of schedule Taxes (from 2025); sector expansion to include organic chemicals, plastics and hydrogen; taxation of indirect emissions (emissions from the use of electricity produced); accelerated removal of EU industries’ access to carbon market mechanisms (EUETS) Free emission allowances to be completely eliminated by 2030; extension of carbon tariffs to all sectors covered by the EU carbon market by 2030.

He believes that if the EU’s carbon tariff legislation eventually adopts the more radical option mentioned above, its impact on our exports must be reassessed.

Wu Bixuan introduced that within the European Parliament, the role of the Committee on Environment, Public Health and Food Safety is to draft a carbon tariff plan representing the position of the European Parliament. The result of the vote means that a compromise has been reached within the committee. “It is expected that in early June, this plan will be subject to a plenary deliberation vote by the European Parliament.” “If passed, this plan will become the European Parliament’s official position on carbon tariffs.”

“It is particularly emphasized that this progress does not mean that the carbon tariff has completed the legislative process in the EU, it means that the European Parliament is only one step away from coming up with a final plan.” Wu Bixuan said.

On March 15, the carbon border adjustment mechanism was approved at the meeting of the European Council’s Committee on Economic and Financial Affairs (ECOFIN). The finance ministers of the 27 EU countries have adopted a proposal by France, which holds the EU Council’s rotating presidency, on a carbon border regulation mechanism.

“The carbon border adjustment mechanism has faced a lot of controversy since it was proposed.” Zhang Jianhong, a senior engineer at China International Engineering Consulting Co., Ltd., also told Yicai this morning that unilateral carbon tariffs will distort normal international trade. Countries lag behind developed countries in climate policy formulation and are often more dependent on the export of high-carbon products, carbon tariffs will impose additional burdens on countries that rely on high-carbon exports, especially low-income countries, dragging down the low-carbon transition of these countries.