EU Carbon Border Levy Plan

The European Union (EU) has revised its carbon border levy policy, which will now cover just 10% of the companies initially included in the scheme. This decision was backed by EU countries on Tuesday, with the aim of focusing on firms that are responsible for nearly all emissions involved.

Key Approvals and Changes

• The EU's revised plan is likely to exempt most of the 200,000 importers initially set to face this carbon border tariff.
• Final changes still require negotiation with the European Parliament, which has shown support for the proposals.
• Ministers from EU countries approved the proposed changes during a meeting in Brussels.

Purpose of the Carbon Border Tariff

• Designed to protect European producers from cheaper imports from countries with weaker climate regulations.
• Imposes a fee on imported goods equivalent to the carbon price paid by EU-based companies under the bloc's CO₂ emissions rules.

Details of the Revised Policy

• The revised policy targets the 10% of importers responsible for over 99% of the emissions affected by the policy.
• Applies to companies importing more than 50 metric tons per year of goods such as steel, cement, aluminium, and fertilizers.
• This replaces the original threshold that required payment from those importing goods worth more than €150 ($170).
• From 2027, companies will need to buy permits to cover carbon emissions for imports made from 2026 onwards.

The European Commission proposed these changes in February, aiming to reduce bureaucracy for smaller businesses while maintaining the policy’s environmental impact.