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EU MEMBER STATES SUPPORT A PLAN FOR A WORLD-FIRST CARBON BORDER TARIFF

by Juhi Tripathi

Date & Time: Mar 18, 2022 9:00 PM

Read Time: 2 minute


HIGHLIGHTS:

  • The European Union (EU) countries have voted to the world's first CO2 emissions tariff
  • The major goal, is to prevent "carbon leakage"
  • The European Union seeks to impose CO2 emissions taxes on steel, cement, fertilizers, aluminum, and energy imports

The European Union (EU) countries have voted to levy the world's first carbon dioxide (CO2) emissions tariff on polluting items imported from other countries.

Aim to impose tariff

The major goal, according to the EU, is to prevent "carbon leakage" and to urge partner countries to implement carbon-pricing regimes.

The European Union seeks to impose CO2 emissions taxes on steel, cement, fertilizers, aluminum, and energy imports, in order to protect European industry from being undercut by cheaper commodities produced in countries with lax environmental regulations.

Overview

The European Union (EU) plans to impose carbon dioxide (CO2) emissions charges on steel, cement, fertilizers, aluminum, and power imports beginning in 2020.

The plan's finer specifics have yet to be completed, but they will be worked out in future negotiations.

The purpose of implementing this tax is to defend European industry from cheaper items produced in countries with lax environmental regulations.

This carbon border tariff, according to the EU, is an attempt to level the playing field by imposing the same carbon dioxide (CO2) charges on EU and non-EU enterprises.

How will EU be benefited with this tariff?

This action, according to the EU, will prevent carbon leakage and encourage partner nations to implement strong environmental legislation and carbon pricing systems. This will also aid countries in the European Union (EU) in their fight against climate change. This carbon tariff plan is part of the EU's climate change initiatives, which aim to reduce carbon emissions in the EU by 55 percent by 2030 compared to 1990 levels. The EU governments and the European Parliament have accelerated negotiations, and a three-year transition period for imposing carbon tariffs will begin in 2023.

Also Read: IN TERMS OF MARKET CAPITALIZATION, INDIA JOINS THE TOP FIVE COUNTRIES IN THE WORLD.


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