European Union Launches First Phrase Of Carbon Tax Regime
On October 1, the European Union (EU) launched the initial phase of the world’s first system to impose taxes on carbon-intensive imports like iron and steel.
The EU will not collect these penalties until 2026, however. As Aluminum Insider explained, this first phase requires importers to EU countries to disclose greenhouse gas emissions integrated during the manufacturing of imported goods.
The aim of this phase is to serve as a pilot for the larger scheme and collect information on embedded emissions in order to refine the methodology for the period starting in 2026 where penalties will be collected.
The European Commission has argued its regime aligns with World Trade Organization rules, but, as Connecting the Dots has reported, trade partners have raised concerns about the administrative overhead that could be involved in exporting to Europe under the new program.
Because of these concerns, the U.S. government even asked the EU to exempt U.S. operations. According to Aluminum Insider, the U.S. request is unlikely to be approved.
The carbon tax is part of the EU’s “Fit for 55 in 2030” plan, which aims to reduce the EU’s greenhouse gas emissions by at least 55 percent of their 1990s levels by 2030.