In an effort to reduce the importation of goods that generate environmental damage during their production processes, the EU has declared their support of a plan to impose carbon tariffs on said goods.
The EU aims to introduce such a tax on materials such as aluminum, cement, electricity, fertilizer, and steel as a part of a larger plan to cut the EU’s greenhouse gas emissions by more than half by 2030 compared to 1990 levels, but the exact details of the carbon tax plan are still to be determined during future meetings.
So far, what has the EU decided on?
The European Commission hopes to implement the carbon tariff by 2026, with transitional shifts taking place as soon as next year.
The EU and the European Parliament plan to approve the final rules on the tax before the anticipated transition period.
The European Parliament expects a framework to be set by this summer, the details of which will be finalized by this fall.
What do EU leaders think about the proposed tariff?
Currently, France is taking on the responsibility of taxing carbon emissions outside the EU on products that are meant for EU consumers. According to French Finance Minister Bruno Le Maire, the anticipated introduction of these carbon tariffs is “a major step forward in the fight against climate change.”
What are the obstacles to a new EU green tax?
Europe’s ambitious green goals will require substantial investments into technologies such as hydrogen, in combination with tax policies such as the carbon tariffs. While CO2 permits are in use to keep EU industries competitive, the hope is for these to be soon phased out.
There are also some concerns about industries seeking out countries that are not so stringent in their carbon regulation regimes.
Despite the hurdles we still have to face as a global community, the EU’s plan will be a gigantic move forward in the fight against climate change.