EU: New step towards carbon tax at borders
MACF, a carbon adjustment mechanism at borders, will tax EU imports of steel, aluminium, cement, fertilizer and electricity by 2023.
On Tuesday 15 March in Brussels, the Ministers for the Economy of the Twenty-Seven reached an agreement on the draft carbon tax at the borders, called MACF. This is why Paris, which, at the rotating presidency of the Council of the European Union until June, had made it a priority. The dossier is now in the hands of the European Parliament, which is expected to give its position in June. LFinal Agreementshould be completed before the end of the year with aprogressive entry into force from 2023.
Member States have therefore validated the main lines drawn up last summer by the European Commission as part of its climate planFit for 55(cf.European climate plan: carbon and kerosene taxes on the programme). The MACF will come to taxEU importsinfive sectorsthe most intense carbon:steel, aluminium, cement, fertilizer and electricity. Still under discussion, its amount should be determined according to the level of pollution generated by the production of the goods concerned.
The objective of this carbon tax is to:
- avoid « Carbon leakage » with relocations to third countries less concerned with greenhouse gas emissions,
- maintain the competitiveness of European producers and encourage foreign partners to adopt more sustainable practices.
MACF should only reportEUR 1 billion per yearthe EU budget, a new own resource which will contribute to the reimbursement of the European Recovery Plan.
An important issue for the Twenty-Seven remains: the abolition of free emission allowances allocated so far to European industrialists.
Source(s): The Echoes