This week, the European Parliament’s Committee on Environment, Public Health and Food Safety is voting on an own-initiative report on a carbon border adjustment mechanism compliant with World Trade Organisation (WTO) rules. The mechanism, which is complementary to the EU’s internal carbon pricing, would put a carbon levy in place on certain imported goods in order to reduce the risk of ‘leakage’ of emissions outside the EU. If approved by the Committee, the report could be voted on in Parliament next month.

The report comes in a decisive year for the European Green Deal and Europe’s climate ambitions. The European Commission is expected to present a package of EU legislation aiming to bring EU law on energy and climate up to speed with the bloc’s climate objectives for 2030 by the end of June. Among these new measures, the carbon border adjustment mechanism aims to protect the EU’s climate ambitions and industrial competitiveness.  By avoiding the transfer of energy-intensive production from the EU to third countries with weaker emission regulation or the replacement of EU products by more carbon-intensive imports, the mechanism would provide a level playing field for European companies and manufacturers in parts of the world with lower environmental standards. While the EU’s proposal still has many grey areas, it would need to comply with WTO rules to avoid trade disputes. The carbon border tax would also contribute to the bloc’s efforts to create new revenue streams, estimated at several billion euro.

Key Texts

• European Commission: Inception impact assessment for the carbon border adjustment mechanism CBAM
• Council: Decision on the system of own resources of the European Union
• European Parliament Research Service: Carbon emission pricing: some points of reference

Upcoming Dates

• 4 February: ENVI Committee Meeting
• 24 February: Expected launch of the new EU strategy on adaptation to climate change
• 8 March: Indicative European Parliament’s plenary sitting date, 1st reading/single reading

The European Movement International position

In our policy position on “Moving Towards a Sustainable Future” we argue that a sustainable economy and society rely on a healthy environment. While the protection and well-being of citizens should be at the core of a sustainable future, a competitive industry is the foundation for smart, innovative growth in Europe providing jobs and welfare for EU citizens. 

Moreover, in our policy position on  “A European Union Response to COVID-19” we highlight that the European Green Deal, as the EU’s growth strategy, should guide Europe’s recovery from the pandemic. It is crucial that the recovery of Europe’s economy must prioritise the transition to a just and sustainable future while also ensuring that all sectors are on a path towards climate neutrality. A bigger share of own resources would allow the EU to be more flexible in shaping and implementing its policies, while also providing the necessary tools to fight climate change and promote the transition to renewable energy.