EU's Carbon Border Levy Revision
The European Union (EU) has revised its plan for the carbon border levy, reducing its scope to cover just 10% of companies initially targeted, focusing on those with significant emissions.
Key Highlights
- Scope Reduction: The revised plan targets firms responsible for nearly all emissions, exempting most of the 200,000 importers initially set to be included.
- Negotiation Status: While EU countries have approved the changes, final negotiations with the European Parliament are pending, though support is expected.
- Purpose: The carbon tariff aims to protect European producers from foreign competitors with lower climate standards, ensuring imported goods face equivalent carbon costs as EU-based companies.
- Bureaucracy Reduction: Proposed changes aim to lessen administrative burdens on smaller businesses while maintaining environmental effectiveness.
- Emissions Coverage: The revised rules cover 10% of importers, accounting for over 99% of emissions impacted by the policy.
- Application Criteria: The levy applies to companies importing over 50 metric tons annually of goods like steel, cement, aluminium, and fertilizers.
- Threshold Change: Previously, imports worth more than €150 ($170) would trigger the levy. The new criteria focus on emissions.
- Future Requirements: Starting 2027, companies must buy permits for carbon emissions of imports from 2026 onwards.
