EU seals agreement on world’s first carbon tariff

(EurActiv, 13 Dec 2022) EU negotiators reached an agreement early on Tuesday morning (13 December) that will pave the way for Europe to set up the world’s first levy on carbon-intensive goods entering its market.

The so-called carbon border adjustment mechanism (CBAM) will mirror the EU’s own domestic carbon price, thereby shielding European industry from cheaper, more-polluting products imported from abroad.

It will initially apply to imports including iron and steel, cement, aluminium, fertilisers and electricity as well as hydrogen.

The agreement was sealed the day after the G7 group of industrialised nations announced the creation of an “international climate club”, aimed at fostering greener industry.

“For the first time, we will ensure fair treatment for our enterprises, which pay a carbon price in Europe, and their foreign competitors, who do not,” said Pascal Canfin, the chairman of the European Parliament’s environment committee.

“This is a major step that will allow us to do more for the climate while protecting our businesses and our jobs,” he said in a statement.

“CBAM will be a crucial pillar of European climate policies. It is one of the only mechanisms we have to incentivise our trading partners to decarbonise their manufacturing industry,” said the European Parliament’s lead negotiator, Mohammed Chahim.

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EurActiv, 13 Dec 2022: EU seals agreement on world’s first carbon tariff