EU Carbon Import Tariffs Could Torpedo Global Climate Deal

Posted by Eric Haun
Thursday, July 10, 2014

A move by the European Union to impose duties on carbon-intensive imports would scupper the chances of striking a global agreement to tackle climate change next year, the bloc's top climate official said on Thursday.

European leaders have agreed to decide by October whether to set a 2030 goal to cut carbon emissions as the EU contribution to a global pact to tackle climate change, due to be signed in Paris in late 2015 and take effect from 2020.

Last month France suggested measures could be taken against imported goods to ease concerns that the 2030 goals could threaten heavy industries competing with foreign rivals that might be subject to laxer environmental goals.

But Jos Delbeke, director general of the European Commission's climate department, said that raising the possibility of import tariffs in the run-up to the global agreement would risk angering the bloc's trading partners.

"If we were to put a border tax on the table before Paris, it's the recipe that could torpedo that process," he told a online meeting of industry officials on the so-called carbon leakage issue in Brussels.

He was referring to the EU's failed effort to regulate carbon emissions beyond its borders by including foreign flights in the bloc's Emissions Trading System (ETS).

In April, EU lawmakers effectively reversed a 2009 law to force international flights using EU airports to pay for their emissions after countries including the U.S. and China complained that it infringed on their sovereignty.

"The aviation debate was exactly like that, in treating every consumer in the world the same  we got a cold shower over us," Delbeke said.

Industry Split
France has suggested the cement industry could be a pilot sector for imposing tariffs on importers, and this idea was backed by Claude Lorea of the EU cement producer association Cembureau at the Brussels meeting.

She said non-EU producers should be treated in the same way as local manufacturers when considering the post-2020 targets.

But Bill Thompson of BP, representing oil refinery lobby group Fuels Europe, said the idea could prove too complex to implement for many sectors and posed a risk that other countries could deploy retaliatory trade measures.

"The EU is one of the most trade-exposed places in the world, so be careful what you wish for when you start imposing these types of measures," he said.

"The best protection against carbon leakage is a successful international negotiation," Thompson added, referring to a Paris deal in which all major nations agree to take on comparable emission reduction targets.

The EU ETS regulates around half of Europe's greenhouse gas output by forcing power plants, factories and airlines to surrender a carbon permit for every tonne of carbon dioxide they emit. It its the bloc's main policy to meet its 2020 target to reduce emissions 20 percent under 1990 levels.

Heavy industries such as steel and cement currently receive most of their permits for free to help them compete globally.

The Commission has yet to propose whether this system should continue after 2020, and it is a matter of intense debate. In May Delbeke suggested that the list of industries getting free permits should be trimmed.

(By Ben Garside; editing by Jane Baird)

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