MEPs push for a carbon price on imports as to prevent ‘carbon leakage’

All products under the EU Emissions Trading System should be included

Photo: EP Yannick Jadot.

In their resolution on a WTO-compatible EU carbon border adjustment mechanism, adopted during this week’s plenary session, MEPs urge for introduction an EU carbon price on certain imports from less climate-ambitious countries.

The resolution points out that the EU’s increased ambition on climate change must not lead to ‘carbon leakage’ as global climate efforts will not benefit if EU production is just moved to non-EU countries that have less ambitious legislation in this respect.

As EP rapporteur Yannick Jadot (Greens/EFA, FR) stated, the carbon border adjustment mechanism is a great opportunity to reconcile climate, industry, employment, resilience, sovereignty and relocation issues. We must stop being naïve and impose the same carbon price on products, whether they are produced in or outside the EU, to ensure the most polluting sectors also take part in fighting climate change and innovate towards zero carbon, he highlighted.

The rapporteur also recalled that this is the best chance of remaining below the 1.5°C warming limit, “whilst also pushing our trading partners to be equally ambitious in order to enter the EU market”.

Putting a carbon price on certain goods imported from outside the EU, if these countries are not ambitious enough about climate change would create a global level playing field as well as an incentive for both EU and non-EU industries to decarbonise in line with the Paris Agreement objectives, MEPs say.

This measure, according to the lawmakers should be WTO-compatible and designed specifically to meet climate objectives. It must not be misused as a tool to enhance protectionism.

They insisted revenues generated should be used as part of a basket of own revenues to boost support for the objectives of the Green Deal under the EU budget.

The EP asserted that the new mechanism should be part of a broader EU industrial strategy and involve all imports of products and commodities covered by the EU ETS. Already by 2023, and after an impact assessment, it should cover the power sector and energy-intensive industrial sectors like cement, steel, aluminum, oil refinery, paper, glass, chemicals and fertilisers, which still represent 94 % of EU industrial emissions and continue to receive substantial free allocations.

Linking carbon pricing under the mechanism to the price of allowances under the EU ETS will help to combat carbon leakage, MEPs underscored noting that the new mechanism must not lead to double protection for EU installations.

 

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