Members of the European Parliament (MEPs) are calling for the implementation of a carbon price on certain imports from less climate-ambitious countries to raise global ambition on climate change.
Parliament adopted a resolution on a World Trade Organisation-compatible EU carbon border adjustment mechanism (CBAM), with 444 votes for, 70 against and 181 abstentions.
MEPs are supporting putting a carbon price on certain goods imported from outside the EU if these countries are not ambitious enough about climate change.
They believe this would create a global level playing field as well as an incentive for both EU and non-EU industries to decarbonise in line with the Paris climate agreement.
They suggest the new mechanism should be part of a broader EU industrial strategy and cover all imports of products and commodities covered by the EU Emissions Trading System (ETS).
MEPs add that already by 2023 and following an impact assessment, it should cover the power sector and energy-intensive industrial sectors like cement, steel, aluminium, oil refinery, paper, glass, chemicals and fertilisers, which continue to receive substantial free allocations and still represent around 94% of EU industrial emissions.
They believe that linking carbon pricing under the CBAM to the price of EU allowances under the EU ETS will help to combat carbon leakage but underline the new mechanism must not lead to double protection for EU installations.
French Parliament Rapporteur Yannick Jadot said: “The CBAM is a great opportunity to reconcile climate, industry, employment, resilience, sovereignty and relocation issues. We must stop being naïve and impose the same carbon price on products, whether they are produced in or outside the EU, to ensure the most polluting sectors also take part in fighting climate change and innovate towards zero carbon.
“This is our best chance of remaining below the 1.5°C warming limit, whilst also pushing our trading partners to be equally ambitious in order to enter the EU market.”
The Commission is expected to present a legislative proposal on a CBAM in the second quarter of 2021 as part of the European Green Deal, as well as a proposal on how to include the revenue generated to finance part of the EU budget.
