EU official policies applicable to taxation of goods imported pollution

(KTSG Online) – mechanism adjust border carbon (CBAM) of the European union (EU) officially take effect during the transition period from the date of 1-10. Initially, the CBAM will apply with respect to activities, import some goods and precursors in six field emission of carbon in the production process, including cement, iron and steel, aluminum, fertilizer, power and hydrogen.

In the transition phase, lasts 18 months, starting from the date of 1-10, the importers of the EU in the above areas to monitor and report carbon emissions in the production process of goods that they import.

The importer is required to collect data for quarter 4 - 2023 and submit reports on the first day 31-1-2024. During the transition period, they have not yet been applied carbon tax for the import goods this, but will be faced with levels from 10 - 50 euro for every ton of emissions not reported.

The European commission (EC), the executive bodies of the EU description this is the “learning period” for all importers, manufacturers and authorities.

The transition period allows the EC to gather information about emissions in goods imported to the method of calculating the carbon tax for the next stage.

Starting from the year 2026, the importers will be charged a carbon tax, i.e., right to buy the stock only emissions carbon (also called certificate CBAM), corresponding to the amount of carbon emissions in goods that they import from countries with tax rates lower emissions or not taxing this.

CBAM is designed to help companies in the EU, which must comply with the law, climate strict not face the unjust competition from the manufacturer outside the block.

“This policy have the meaning of strategy and finance for businesses around the world. Today is just the beginning of a long process. Even if some company is not affected immediately, they can still be targeted in the later stages, because the EU is allowed to put more industry than in CBAM”, Heart Pictures, senior specialist of the airline consulting Boston Consulting Group, comment.

CBAM has faced opposition from the major trade partner of the EU, including Russia and China, the country that for this mechanism to undermine the principles of free trade. CBAM also increased tensions trade between the EU and the Us. Earlier this year, the acting President Joe Biden asked the EU to apply exemptions CBAM items for steel and aluminum exports of the united states.

Once the carbon tax, CBAM will be an important test to see whether the pricing carbon can be set up around the world as part of an effort to curb global warming or not. In stage Monday of CBAM, starting from January 1-2026, the company EU imported goods in the 6 areas of pollution pay to pay the carbon tax increases gradually up through each year to match the price on the carbon market of the EU. Today 29-9, the contract price of emission standards in the EU is around 82 euros per tonne of carbon.

The idea of pricing emissions at European borders have been discussed during the past two decades, but not until the beginning of the year, new EU through CBAM as part of the deal blue ambitious. The EU set a target binding is reduced by at least 55% of greenhouse gas emissions in this decade compared with the level recorded in 1990 and achieved the goal of putting emissions net carbon on the zero in the middle of this century.

According to Heart Pictures, even the transitional phase of the CBAM, the producers in the exporting countries must also be under pressure to focus more on the carbon emissions of their.

“Firstly, their products will be less competitive if they do not reduce emissions. And Monday, promising to pay the carbon tax in the EU will act as motivation encourage them to invest in desalination carbon”, Heart Pictures to explain

Pictures for, that it could also mean that there will be change in trade patterns. The product emissions carbon will be difficult to sell than on the EU market, so they can be transferred to the water Tuesday does not impose tax on carbon.

Account the carbon tax can be for at least a part if the carbon tax has been charged in the country where the goods pollution is produced. This creates more motivation for the water Tuesday launched the blue book of their own. How to calculate carbon tax so also helps CBAM this is not considered tax-related illegal according to the rules of the Organization of world trade (WTO).

The EU is still a lot of work to do to CBAM smooth operation, from ensuring compliance monitoring in the member states for bringing out the technical regulations for more details. This block will also have to face the legal challenge at the WTO and the dispute with the trade partner.

Els Brouwers, director of the energy, climate and economy of Essenscia, lobbying group for the chemical industry, Belgium, describes this mechanism as “the burden of administrative procedures for EU importers”.

The home environment and economics, including the economics Nobel prize laureate William Nordhaus has long advocated the pricing of carbon with respect to imported goods, as this allows the water to link together and form a “club carbon” to remove the status of a number of trading partners benefit from efforts to control their carbon. Germany has launched their own idea of such an alliance with the members of the group of industrial countries G7.

According to Antoine Vagneur-Jones, head of the commercial chain and supply representative finance company new energy sun viewer, CBAM can also create motivation for the carbon market fledgling in other countries, such as the emission market of China, and encourage other countries to build the carbon market of their own.

“CBAM will not soon lead to the other countries, the price of carbon close to what the EU is doing. But in countries where the pricing carbon can be acceptable politically, this can certainly play a role as a motivation,” Vagneur-Jones identified.

Source: vietnamnews.vn