by Eric Worrall at Watts Up With That
This new carbon tax is a slap in the face for every non-EU nation which has contributed to Europe’s attempts to contain Russia.
Europe takes climate fight global as carbon border tax goes live
The Carbon Border Adjustment Mechanism enters a trial phase on Sunday.
BY FEDERICA DI SARIO AND GIORGIO LEALI
OCTOBER 1, 2023 12:16 PM CETThe EU’s effort to become climate neutral is kicking into high gear — as of Sunday the bloc’s carbon border tax enters a trial period, which is likely to raise tensions with key trading partners.
The Carbon Border Adjustment Mechanism — or CBAM — was adopted last year with the aim of ensuring that goods manufactured in Europe, and subject to the EU’s Emissions Trading System, which sets a price on carbon emitted, will be able to withstand competition from products made in countries where polluting doesn’t come with the same price attached.
Starting October 1, the EU’s trading partners will have to report the greenhouse gas emissions tied to their exports of iron, steel, cement, aluminum, fertilizer, hydrogen and electricity.
Initially, the requirement is just to report the emissions — although companies failing to do so face fines — the actual payments go into effect in 2026.
The point of the exercise is to both shield EU companies from unfair completion and to nudge other countries into setting their own price on carbon. Non-EU producers can deduct the cost of CBAM if they have their own domestic carbon tax.
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Australia has slammed the planned carbon border levy for harming global growth, while the U.S., which has no national carbon price, is seeking an exemption.
There is particular concern about the impact of CBAM on the U.K. The price of its own emissions trading scheme has collapsed to less than half the level of the EU ETS, meaning British exporters are likely to have to pay hefty fees to the EU.
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Ukrainian businesses, however, will be exempted because of the war. A European Commission official confirmed that the legislation contains a “provision to tackle exceptional and unprovoked situations with destructive consequences on the economic and industrial infrastructure in a given country.”
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The import carbon tax is an attempt to mitigate the economic devastation caused by Europe’s obsession with unaffordable green energy.
The EU has a big problem with “carbon leakage” –…
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