EU Sees Carbon Border Levy as "Matter of Survival" for Industry

February 1st 2021
The EU Commission is expected to propose its carbon border adjustment policy before the end of June as part of a broader package of climate laws aiming to cut emissions by 55% before the end of the decade. Commission executive vice-president Frans Timmermans said: "It’s a matter of survival of our industry. So, if others will not move in the same direction, we will have to protect the European Union against distortion of competition and against the risk of carbon leakage." Carbon leakage would occur if companies left Europe to avoid the cost of its emissions-cutting policies.

While Mr. Timmermans hopes that other major emitters will adopt carbon pricing policies as well, if the COP26 climate summit next November fails to deliver sufficient climate action, the EU will press ahead with unilateral carbon border measures.

Germany's agriculture ministry is also pushing for a carbon adjustment mechanism at EU borders to ensure that climate action in the bloc’s farming sector doesn’t endanger farmers’ livelihoods and cause carbon leakage. Germany can only achieve so much in trying to decarbonize its agriculture sector because its farmers are facing international competition, state secretary in the Federal Ministry for Food and Agriculture Beate Kasch said. Emissions from animal husbandry, manure and land-use (soils) in the German farming sector have not been reduced significantly over the past decade as farmers struggle with low prices for their products and consumers in Germany have been slow to embrace a less meat-heavy diet. The sector is supposed to achieve a 35.6% reduction in emissions by 2030 compared to 1990.

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