EU lawmakers call for carbon border costs by 2023, eventually for all industry
- Lawmakers in the committee said emissions-based charges should initially apply to products sold into the EU including steel, cement, chemicals and fertilisers.
- Carbon leakage would occur if companies relocate outside the EU to avoid the cost of stringent climate policies.
BRUSSELS: The European Parliament's environment committee on Thursday adopted a report calling on the European Union to impose carbons costs on imports of electricity and polluting industrial goods no later than 2023, under the bloc's proposed carbon border policy due in June.
By forcing companies to pay a fee to sell carbon-intensive goods into Europe, Brussels aims to level the playing field for domestic firms as they invest in rapidly cutting emissions to meet EU climate goals.
Lawmakers in the committee said emissions-based charges should initially apply to products sold into the EU including steel, cement, chemicals and fertilisers, and eventually to all commodities and products covered by the bloc's carbon market.
The lawmakers will rubber stamp their position with another vote on Friday. The report, which will be voted on by the full legislature in March, aims to inform the European Commission's upcoming carbon border policy proposal.
Yannick Jadot, parliament's lead lawmaker on the policy, said it would "reinforce our climate action, and at the same time protect our industry by avoiding carbon leakage".
Carbon leakage would occur if companies relocate outside the EU to avoid the cost of stringent climate policies.
The lawmakers said the carbon border fee should mirror the price EU companies pay to pollute under the bloc's carbon market. This could be done by forcing importers to buy carbon permits from a supply pool kept separate from the EU market.
They said foreign producers should provide data on the emissions content of their products, or an estimate would be made based on factors including the global average emissions content for a product.
Currently, the EU gives industry free permits under its carbon market to protect them from carbon leakage.
Since the border measure would put EU and foreign firms on a level footing by imposing the same carbon price on both, free EU carbon permits should be phased out as the carbon border policy is introduced, the lawmakers said.
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