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EU introduces the world’s first Carbon Border Tax. How global producers will be affected

July 22, 2021
EU introduces the world’s first Carbon Border Tax. How global producers will be affected

By Nikos Avlonas, President of CSE


The European Commission has recently announced plans for a new carbon border adjustment mechanism (CBAM), or well know as Carbon Border Tax  which would levy charges on non-EU products in relation to their embedded carbon footprint. The mechanism will be phased in gradually from 2026 and will initially apply only to a selected number of goods such as iron and steel, cement, fertilizer, aluminum and electricity generation. The Carbon Border Tax included in the ‘Fit for 55’ package of proposals as part of the EU’s Green Deal.



The mechanism is designed to ensure that European emission reductions contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe. It also aims to accelerate global climate action and encourage other countries to introduce similar mechanisms.



While Carbon Border Tax  is designed also for  protecting European industries from competitors abroad the proposal has caused great concern in Russia as its industries are expected to be affected. US government  has also expressed a concern as the mechanism will burden the cement, fertilizer, steel, iron, coal and electricity industries. The idea has also received a hostile reception from China.



Especially Russia has calculated that it is expected to lose $7.6bn from it, making Moscow potentially one of the biggest losers from the measures. It is Europe’s biggest supplier of carbon-intensive products, worth an estimated €10bn in 2019. Total EU imports from Russia amounted to €145bn in 2019, making Russia the EU’s fifth-largest trading partner.



While observing the EU’s new moves, US advocated this week a carbon border tax, even though the country lacks a national carbon pricing mechanism. Climate policy is increasingly becoming interwoven in trade policy and countries are serious about trying to decarbonize these industrial sectors.



Climate action has become a driver not only for countries, but for businesses and investors, too. CSE successfully holds the international Certified Sustainability (ESG) Practitioner Program for business executives, presenting all the new trends in sustainable and ESG development and how to gain a competitive advantage.



Don’t miss your chance to become a Certified Sustainability (ESG) Practitioner. Upcoming digital trainings include:  Seattle, Sept. 9-10 &13 (Advanced Edition), Asia- Pacific, Sept. 23-24 & 27 (Advanced Edition) and Canada, Oct. 21-22 & 25 (Leadership Edition)


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