EU: CO2-tax for Steel, Cement and Electricity Imports

The European Commission wants to impose a CO2 limit tax on imports of goods such as steel, cement and electricity. This emerges from a draft law by the Brussels authority, which is available to the stock exchanges newspaper and which is to be published in mid-July.

Photo by Christian Lue on Unsplash

This is to ensure that local companies do not have a major competitive disadvantage compared to countries with much lower CO2 taxes.

The new climate tariff, which will be introduced gradually from 2023 and fully implemented from 2026, will then cover both direct emissions such as those from the production of goods, but also indirect ones such as electricity that is consumed during the production process of goods.

Importers would then have to buy digital certificates, with each certificate representing one tonne of carbon dioxide emissions contained in the imported goods. The price of the certificates is linked to the cost of the certificates in the EU emissions trading system.

According to the draft, the CO2 tariff will not apply to countries within the customs union, which includes Iceland, Norway and Switzerland. If countries have similar CO2 prices as Europe, the tariff would not apply either.

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