EU should roll out CO2 border tax earlier, apply it to indirect emissions from electricity

Carbon border tax indirect emissions from electricity european parliament report

Photo: marcinjozwiak from Pixabay


January 12, 2022






January 12, 2022





The proposed carbon border tax should be broadened to organic chemicals, hydrogen and polymers, introduced a year earlier, from 2025, and applied to indirect emissions, such as those from the use of electricity, according to a draft report from the European Parliament.

The document prepared by member of European Parliament Mohammed Chahim is part of the legislative procedure for the adoption of the European Commission’s proposal for the carbon border adjustment mechanism (CBAM), published in July 2021. In the current phase, the lawmakers and European Union member states are negotiating on it.

The commission has proposed CBAM to apply to imports of cement, iron, steel, fertilizers, aluminium and electricity from countries outside of the EU that don’t have carbon pricing schemes. The proposal envisages the CO2 tax to be phased in from 2023 until 2026, and levied only on direct emissions of greenhouse gases.

The climate ambition of the proposal must be higher

Mohammed Chahim, the rapporteur in the Committee on the Environment, Public Health and Food Safety of the European Parliament, firstly intends to broaden the scope of the proposal to cover organic chemicals, hydrogen and polymers, as well as indirect emissions in all sectors covered by CBAM.

The rapporteur considers it necessary to extend the levy to indirect emissions already at this stage, to heighten the climate ambition of the proposal, the report reads.

Transitional period to be shortened by a year, and full implementation by seven years

He also proposed an incremental and speedier phase-in of CBAM so that the system becomes an alternative to free allowances and fully operational from the beginning of 2029, not from 2036, and to shorten the transitional period by one year to end-2024.

The rapporteur suggests shortening the transitional period due to the climate emergency and the EU’s own 2030 objective, the report underlined.

The CBAM factor (to reduce free allowances) would start after the pilot phase, and shall be equal to 90% in 2025, 70% in 2026, 40% in 2027, and reach zero by the end of 2028, Chahim wrote on Twitter.

The EU will provide financial support for decarbonization in least developed countries

In the report, he stressed the intention to make CBAM an instrument that incentivizes cooperation rather than confrontation with the EU’s partners, notably with least developed countries (LDCs).

It should however be very clear that only trade partners with explicit carbon pricing policies in place can be exempt from CBAM while the EU needs to avoid CBAM affecting LDCs disproportionally, Chahim said.

He proposed to the EU to provide financial support to stimulate the decarbonization of the industry in LDCs.

Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

Two four European Sustainable Energy Awards Southeastern Europe

Two of four European Sustainable Energy Awards go to Southeastern Europe

26 September 2022 - Timea Farkas is the Young Energy Trailblazer at European Sustainable Energy Awards and the Minoan Energy Community won in the Local Energy Action category

City of NiS starts development of Energy Transition Roadmap until 2050 tender

City of Niš in Serbia to develop Energy Transition Roadmap until 2050

26 September 2022 - The local team in charge of the project is seeking an experienced consultant to support the work, the deadline for offers is October 4

EU Commissioner Simson this year EUSEW most important so far

EU Commissioner Simson: This year’s EUSEW is most important one so far

26 September 2022 - The European Sustainable Energy Week – EUSEW started today with top EU officials urging for a faster energy transition

Denmark first to take responsibility for loss and damage from climate change

23 September 2022 - A global mechanism to compensate for loss and damage caused by climate change could come to life after years of unsuccessful negotiations