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German industry wants export rebates, free certificates and a carbon border levy
(EurActiv, 11 Feb 2022) As France continues to push for a new border levy for carbon-intensive products entering the EU, German stakeholders fear that removing their free permits to pollute could destroy their competitiveness abroad.
The EU carbon price is approaching €100 per tonne and imposes climate protection costs on European industries that are unmatched anywhere else in the world.
So to stop companies leaving Europe for countries where it is cheaper to produce emissions, known as “carbon leakage”, the EU currently allows certain businesses to escape the carbon price via the free allocation of emission certificates.
But now, the European Commission plans to phase out these free allocation certificates as it introduces its carbon border adjustment mechanism (CBAM) for carbon-intensive imports into the bloc. This would protect EU companies as they decarbonise from those facing fewer climate regulations – a protectionist measure that France backs.
However, the end of free allocation will mean industry feels the full brunt of carbon pricing when competing outside of Europe, a concern which has it clamouring for additional measures.
EurActiv, 11 Feb 2022: German industry wants export rebates, free certificates and a carbon border levy
