Frans Timmermans, Deputy Chairman of the European Commission, called the introduction of the Carbon Border Adjustment Mechanism a key factor for the survival of European industry.
This duty will apply to industrial products from those countries outside the EU that will not cut down their CO2 emissions.
This is a matter of life and death for our industry. If other countries do not move towards reducing greenhouse gas emissions, we must protect the European Union from distorting competition and from the risk of carbon leakage
Frans Timmermans
According to him, the European Commission will publish the first proposals for the introduction of CBAM by the end of June 2021, as part of a wide package of climate legislation aimed at curtailing CO2 emissions by 55% until 2030.
Carbon leakage
Carbon leakage could occur if industrial companies start moving their production facilities out of Europe to countries with less stringent greenhouse gas emission policies.
“Therefore, the more countries start to deal with the environment protection, the less there will be a need for a cross-border carbon duty. This is what we are trying to achieve ”, – Mr. Timmermans emphasized.
If this does not happen, the EC will accelerate with the introduction of CBAM, and then the European industry will feel the effect of the introduction of a carbon tax for importers already this year.
Let us remind
Let us remind that within the framework of the European Green Deal, the European Commission intends to introduce a special carbon tax (CBAM) for importers who will not reduce CO2 emissions.
By November 2021, almost 200 countries around the world must formulate their commitments to cut down greenhouse emissions by 2030 under the Paris Agreement. Ukraine intends to undertake obligations (Nationally Determined Contributions 2) to reduce CO2 emissions by 58-64% as compared to 1990.
Decarbonization in Ukraine
In Ukraine, the only incentive for the decarbonisation of the steel industry is the norm of green electrometallurgy. Under this rule, companies that have reduced CO2 emissions to the European target level will be able to claim a small reduction in electricity tariffs.
However, it exists only in theory. Six months after the adoption of the relevant law, the incentive did not work due to the inability of the Cabinet of Ministers to develop the necessary regulations.