Debates on EU carbon border tax

Europe’s Green Deal and Fit for 55 initiative are setting the stage for a new era within the EU’s mandatory carbon market.
Just before the main European Parliament’s vote on the ETS( Emissions trading System) reforms next week, lawmakers from the EU’s major political groupings have suggested amendments to limit investor participation to the bloc’s carbon market and apply more price control mechanisms.
“With our compromise amendment, we give industry and citizens more breathing space in difficult times and avoid a price shock in 2024. At the same time we still achieve more greenhouse gas reduction than in the Commission proposal.” said Dr. Peter Liese, a German Christian Democrat after a presentation of an amendment from his political group and the liberal Renew Europe group.
 “While there was consensus between political groups on a lot of issues in the report on the biggest environmental law ever, the EU ETS including maritime, road transport and buildings, the ambition level was highly controversial.” Stated Liese.
Months of debate between political groups over the ETS reform and the concurrent adoption of a carbon border tax to safeguard EU sectors from environmental dumping will come to an end with the vote in Strasbourg’s plenary chamber.
Last year, the European Commission proposed tightening the ETS in order to accomplish the EU’s goal of cutting carbon emissions by at least 55 percent this decade and achieving net-zero emissions by 2050.
This involves the elimination of free pollution permits for industries such as steel, cement, and chemicals, which now receive the majority of their CO2 allowances for free. CBAM would be implemented in conjunction to safeguard EU industry from cheaper imports of polluting goods from other countries.
However, lawmakers are split on when CBAM should be introduced as a replacement for free CO2 pollution permits.
Pascal Canfin, a French Renew lawmaker who chairs the Parliament’s environment committee during a press briefing said “The problem with CBAM is that you do not cover exports.”
“We did what is called a rebasing so that we don’t have a price shock in the very short term,” he explained.

More information here for the European Green Deal