EU trading partners denounce protectionist blocs on carbon tax plans

EU trading partners have denounced the EU’s plans to introduce the world’s first carbon border tax, calling it protectionist and endangering export industries, with negotiations to complete the deal set to take place over the weekend. continues until

Several developing countries have already started negotiations with Brussels on abandoning the proposal, but this is an interim move until the final round of negotiations is completed this weekend. The agreement must then be approved by the EU ambassador. An open issue includes specific dates for a gradual phase-in.

German MP Michael Bross, the negotiator for the European Parliament, said on Saturday that “a lot was negotiated” on Friday, but “few things were decided”. I hope the talks will “continue and conclude negotiations on Europe’s largest climate protection package,” he said.

Swedish MP Emma Wiesner said Friday’s talks had achieved “amazing progress”. Her other EU officials said no agreement had yet been found on the most divisive issues.

This tax requires importers to: buy a certificate Cover emissions based on calculations linked to the EU’s own carbon price. Iron, steel, cement, aluminum, fertilizer, hydrogen and power generation are all covered by the deal. The trial period he will start in October 2023.

If deemed successful, the EU plans to extend the scheme to other sectors such as automotive and organic chemicals.

Many countries are asking the European Commission to be more flexible in applying tariffs, according to people familiar with the discussions.

The plan has drawn criticism from countries such as the United States and South Africa, who say the Carbon Boundary Adjustment Mechanism (CBAM) unfairly penalizes manufacturers.

South Africa’s Trade Minister Ebrahim Patel told the Financial Times that he was “particularly concerned about things like border adjustment taxes and unilaterally imposed regulatory requirements.” “If it becomes a major decisive factor between North and South, it will face a lot of political resistance.”

“There’s been a lot of concern on our part about how this will affect us and our trade relationships,” U.S. Trade Representative Catherine Tai said at a conference in Washington this week. It is being done,” he said.

The EU sees CBAM as a core part of its efforts to reach net-zero emissions by 2050, while CBAM claims that countries outside the bloc will help decarbonize their industrial sectors.

“CBAM is just a way of intimidating third countries to renew their ambitions when it comes to climate,” said Mohammed Chahim, a Dutch socialist politician who led negotiations on the European Parliament law.

before Russia Invasion of Ukraine, was set as the country most affected by CBAM. Russian exports accounted for the largest share of imports from CBAM-affected sectors. analysis Berlin-based think tank Adelphi, based on data on EU imports from 2015 to 2019.

A drastic drop in imports from Russia due to the EU sanctions regime and the destruction of Ukrainian industry is pushing the burden on other countries.

China accounts for about a tenth of the affected imports, according to Adelphi, while Turkey and India are also affected. China has repeatedly attacked tariffs since they were first proposed last July.

Faten Agad, senior adviser on climate diplomacy at the Africa Climate Foundation, said developing countries with low economic clout and poor systems to measure emissions are likely to suffer most from the introduction of levies. Said expensive.

“The countries most likely to reduce the risk of CBAM are those that already have adequate carbon accounting,” she said. can happen.

“Many of these sectors are at risk of losing business and very difficult to rebuild unless they invest in sustainability.”

Brazilian steelmakers fear CBAM endangers domestic producers. Exporters may target unprotected steel markets such as South America instead of shipping goods to Europe.

“Our big concern is not exports. [Europe]Instead, Marco Polo de Mello Lopes, executive president of Instituto Aço Brasil, says more materials are diverted to the region, leaving the domestic industry “vulnerable.”

Anger over the measure is compounded by the EU’s insistence that the CBAM encourages other countries to decarbonize while not providing the funds to help poorer countries invest in clean technology.

Proceeds from the CBAM are intended to go to the EU’s internal budget, along with a loose commitment to provide climate change finance to countries outside the bloc, according to people familiar with the draft.

Baran Bozoul, chairman of the Association for Climate Change Policy Research, a non-profit research institute in Ankara, said it was “beneficial.” [for the EU] To provide various incentives, support and technology to prevent the Turkish economy from being adversely affected. ”

He added that exporters would have to pay to calculate their carbon emissions and verify it to report to the EU. was a “great injustice,” he said.

Additional reporting by Reuters, Andy Bounds from Brussels, David Pilling from London and Michael Pooler from São Paulo EU trading partners denounce protectionist blocs on carbon tax plans

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