Italy, France and Slovakia demand changes to EU carbon border levy, document shows

By Kate Abnett

BRUSSELS (Reuters) - France, Italy and Slovakia have demanded the EU amend its carbon border levy this year to simplify the rules for businesses covered by the scheme, a document seen by Reuters showed.

The European Commission has already proposed changes that would exempt 90% of companies from the carbon border levy, which from 2026 will impose costs on imports of CO2-heavy goods including steel and cement.

The policy is designed to shield European producers against cheaper rivals in countries with less ambitious climate laws, and prevent them shifting investments abroad to countries including the U.S., where the Trump administration is aggressively rolling back regulation.

France and Italy, the European Union's second and third-biggest economies, demanded on Thursday that Brussels goes further in paring back the policy's administrative rules. This could include by letting companies use standardised calculations for the emissions produced by goods, France, Italy and Slovakia said in a joint paper seen by Reuters.

This would ease the reporting burden for companies covered by the rules, they said, echoing broader calls from some governments and businesses for Brussels to cut red tape to help struggling industries regain a competitive edge.

"The complexity of this system can lead to delays and a significant increase in management and operational costs for European companies," the paper said.

EU countries and lawmakers must negotiate and approve the Commission's proposed changes to the carbon border tariff in the coming months - giving them an opportunity to make further changes to the rules.

The three countries said Brussels should also consider giving European exporting companies free CO2 permits, to help them compete in global markets with rivals that do not pay pollution costs.

Through its bloc-wide carbon market, the EU requires manufacturers to pay for each ton of planet-heating CO2 they emit. China and some U.S. states also have carbon markets, but Europe's CO2 price is far higher than that of other major economies.

EU countries' environment ministers will discuss the three countries' proposal at a meeting in Brussels on Thursday.

(Reporting by Kate Abnett; Editing by Alison Williams)