Steel News

EU Reaches Agreement on Carbon Border Adjustment Mechanism 

12/13/2022 - The European Union has reached a tentative agreement on a plan to tax imported goods whose manufacture produces high levels of carbon dioxide. 

The levy, called the carbon border adjustment mechanism, would be the world’s first tax on the carbon content of imported goods, if ultimately adopted by the EU, reports The Wall Street Journal. 

“With this directive, the polluter is really going to pay, and we are pushing the rest of the world to do the same,” said Mohammed Chahim, a European lawmaker who led talks for the European Parliament, told The Journal. 

According to the Council of the EU, the levy initially will cover “a number of specific products in some of the most carbon-intensive sectors: iron and steel, cement, fertilizers, aluminum, electricity, and hydrogen, as well as some precursors and a limited number of downstream products.”

Indirect emissions would also be included in the regulation, it said. 

The mechanism is to be phased in gradually, beginning in October 2023. At first, imports would be obligated only to report carbon content, as a means to collect data. The levies would kick it later, the council said.