European Carbon Duty Project to boost punitive taxes on polluters

The European Union intends to impose a carbon tax on imports, including steel and electricity results from a draft European carbon duty document.

The aim of the new EU levy is to make it unprofitable to flee high-carbon technologies outside the EU and then sell goods in the EU.

The detailed plan will be presented by the European Commission on July 14.

The European Commission is getting ready to present a package of climate and energy legislation – Fit for 55.

This is the European Commission’s package to be announced on July 14. Its purpose is to set a mechanism by which the European Union will implement the EU’s increased CO2 emission reduction target for 2030 – up to 55%. compared to 1990 levels. The decision to increase the EU’s climate ambitions was taken in December 2020 during the European Council summit.

During the recently concluded (25 May) two-day summit of the EU leaders of the EU Member States, it was not possible to agree on a common position on translating the increased climate ambitions of the Community by 2030 into concrete burdens for the member states. The reason was to be, among others Polish Prime Minister Mateusz Morawiecki has a different opinion on the proposal of the richer EU countries.

Digital certificates as a solution to harmful emissions?
One of the parts of the Fit for 55 package is CBAM (carbon border adjustment mechanism). Its purpose is to even out the burdens related to the climate policy between EU and non-EU producers competing on the European Union market.

The aim of the new EU levy is to make it unprofitable to flee high-carbon technologies outside the EU and then sell goods in the EU.

Originally, CBAM was supposed to act as a climate duty, and therefore burden only imports from outside the EU. But such a fee could be incompatible with the rules of the World Trade Organization (WTO). In Brussels, a solution was sought that would cover all producers, including European ones.

According to a document she reached as the first Reuters agency, the tax would apply to imported steel, iron, cement, fertilizer, aluminum and electricity.

Importers would have to obtain a special identifier from the governing body of CBAM and purchase the “digital certificates” at prices linked to the emission costs in the EU ETS. This is the EU’s CO2 emissions trading system. Its introduction in 2005 was to prepare the Community for the implementation of the Kyoto Protocol – an agreement assuming the implementation by developed countries of reducing CO2 emissions by 5% by 2012. compared to the 1990 level

In connection with the presentation of the Fit for 55 reform package, the reform of the EU-ETS system, considered to be an important part of emission reduction in the European Union Member States, is expected. According to the document Reuters received, the allowances would be sold “per tons” of CO2 emissions. These are both direct emissions in the course of production and indirect emissions, taking into account the quality of electricity used during the production of the commodity.

In the new system, the price of “digital certificates” would be linked to the cost of CO2 emission allowances on the EU market. The solution would be introduced gradually from 2023. The full implementation of the tax should be expected in 2026.

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