Negotiators in the European Parliament and the governments of the EU states have agreed on a kind of defense mechanism against climate-damaging goods from third countries, as the current Czech EU Council Presidency announced today.
The CO2 “border adjustment system” is intended to ensure that the Union’s efforts to reduce greenhouse gas emissions are not canceled out by imports of CO2-intensive products from other countries. In addition, the relocation of production from the EU to regions of the world that are less ambitious than the Union itself when it comes to climate protection should be prevented.
The regulation will initially apply to products such as cement, iron and steel, aluminum, fertilizers, electricity and hydrogen. From October 2023, data on emissions from these goods will be collected.
Costs should be comparable
According to the EU Commission, the system should work by forcing importers to buy pollution certificates for the import of certain products. These are intended to correspond to the carbon price that would have been paid if the goods had been manufactured in accordance with the EU rules for pricing carbon emissions.
Only if a non-EU manufacturer can prove that they have already paid a price for the CO2 equivalent of their product can the EU importer be fully credited with the corresponding costs. This should lead to comparable costs for imported goods and products produced in the EU.