BRUSSELS: The Euro­pean Union launched on Sunday the first phase of the world’s first system to impose CO2 emissions tariffs on imported steel, cement and other goods as it tries to stop more polluting foreign products from undermining its green transition.

The planned tariff has caused disquiet among tra­ding partners and at a forum last month, China’s top climate envoy Xie Zhen­hua urged countries not to resort to unilateral measures such as the EU levy.

The bloc will not begin collecting any CO2 emission charges at the border until 2026.

Sunday, however, marks the start of an initial phase of the Carbon Border Adjustment Mechanism (CBAM) when EU importers will have to report the greenhouse gas emissions embedded during the production of imported volumes of iron and steel, aluminium, cement, electricity, fertilisers and hydrogen.

Importers will from 2026 need to purchase certificates to cover these CO2 emissions to put foreign

producers on a level footing with EU industries that must buy permits from the EU carbon market when they pollute.

European Economy Commissioner Paolo Gentiloni said the aim was to encourage a worldwide shift to greener production and to prevent European manufacturers relocating to countries with lower environmental standards. It is also meant to prevent them from losing out to foreign competitors while they invest to contribute to meeting EU targets to cut the bloc’s net emissions by 55 per cent by 2030 from 1990 levels.

Companies in the Euro­pean Union, Britain and Ukraine have said they expect little initial impact during the trial phase.

The European Commis­sion says the border levy is in line with World Trade Organisation rules in that it treats foreign and domestic firms alike and allows deductions from the border fees for any carbon prices already paid abroad.—

Published in Dawn, October 2nd, 2023