The federal government has hit out at the European Union’s proposal to impose a carbon border tariff, calling it “protectionist,” despite assurances the measure is aimed at leveling the playing field on curbing emissions. Trade Minister Dan Tehan says the move, revealed on Wednesday night, is a threat to Australian jobs and could risk not complying with global trading rules.
Our primary concerns are that we think it is protectionist,” Mr. Tehan told the ABC.
“We think it would be much better to incentivize countries to a deal with emissions reduction, rather than penalizing them.” The Carbon Border Adjustment Mechanism was revealed as part of a raft of the draft climate change measures to secure Europe’s path to carbon neutrality by 2050.
The carbon levy would be first imposed on EU-based businesses that import cement, iron and steel, aluminum, fertilizers, and electricity. However, it must still be approved by 27 member states in the EU Parliament.
It is designed to make sure imports from the overseas face the same carbon price, which would be imposed on goods produced in Europe under the EU’s own emissions trading scheme.
The EU has warned there is a substantial risk of “carbon leakage,” undermining its efforts to drive down emissions through carbon-intensive industries moving to countries with less ambitious climate policies. The policy also intends to encourage countries outside the EU to adopt greener policies that aren’t doing enough to tackle climate change. The levy is part of what has been named the “Fit for 55” package, which intends to reduce emissions by 55 percent on 1990 levels by the end of the decade.