EU’s carbon border tariff to target steel, cement, power, Bloomberg News says

The European Union plans to impose carbon emission costs on imports of goods including steel, cement and electricity, Bloomberg News reported late on Wednesday.

The European Commission is due to propose its carbon border tariff policy on July 14, a move designed to put EU firms on an equal footing with competitors in countries with weaker carbon policies than those of the bloc.

Citing a draft of the proposal, Bloomberg reported that the border levy would be applied in full from 2026, after a phase-in from 2023.

It would apply to steel, cement, fertilisers, aluminium and power, the report said. Importers would be required to buy digital certificates, with each one representing a tonne of carbon dioxide emissions embedded in their imported goods.

The price of the certificates will be linked to the cost of permits in the EU carbon market, and based on the average price of auctions of EU carbon permits each week.

The Commission declined to comment.

Each year, by the end of May, importers must report the amount of emissions embedded in the goods they imported into Europe in the previous year, plus the number of border levy certificates that they surrendered.

EU power plants and industrial facilities are required to buy permits from the EU carbon market to cover their emissions. The permit prices have soared to records this year and on Thursday was trading at 52 euros ($63.34) per tonne of CO2.

The Commission has said that countries whose climate policy ambitions match those of the EU may be able to dodge the border fee.

($1 = 0.8210 euros)

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/business/sustainable-business/eus-carbon-border-tariff-target-steel-cement-power-bloomberg-news-says-2021-06-03/