If it belongs to the European Parliament, from 2027 a CO2 tax at the borders must be paid on the import of products such as steel, fertilizers and cement. The import tax will be equal to the price of CO2 that EU producers pay under the European emissions trading system.
The border tax is an important element of European climate plans, which should lead to a reduction of CO2 emissions by 55% by 2030. It would be the first time that a region not only sets the price of CO2 emissions at within its own borders, but also beyond.
The CO2 border tax coincides with a revision of the European emissions trading system. At present, companies in various sectors still receive free CO2 allowances for all their emissions. Brussels fears they could otherwise be crushed by polluting companies outside the EU.
The border levy should create a level playing field. The European Parliament therefore voted on Tuesday for the total abolition of free rights between 2027 and 2033. From 2027, steelmakers and cement manufacturers will have to pay for each tonne of CO2 emitted. This way they are encouraged to go green.
The first attempt failed
The vote was not without a fight. Parliament was supposed to approve the plans two weeks ago, but it ended in a fiasco. The left and right flanks seemed to have found no compromise on the details, which caused a lot of noise in the room during the vote and the Social Democrats decided, after urgent consultations, to vote against the whole measurements.
Further negotiations eventually resulted in a compromise, which was approved on Tuesday. PvdA MEP Mohammed Chahim, who led the negotiations on the carbon tax, is delighted that “his” proposal has been adopted. “The polluter is really going to pay and we are helping the rest of the world to do the same.”
Shipping also needs to pay the CO2 price
As part of the package of climate measures, maritime transport must also pay for its emissions. There will also be a separate emissions trading system for road transport and building heating.
This will initially only apply to businesses, but from 2029 it may also apply to consumers. They would then pay for their CO2 emissions via a surcharge at the pump or on the energy bill. This is primarily aimed at reducing emissions in countries where excise duties and energy taxes are still very low.
After the vote in parliament, the climate plans still have to be negotiated with EU member states and the European Commission. It could happen later this year.