EU Lawmakers Move to Remove Emergency Brake from Carbon Border Levy
EU Parliament Votes and Implications for Carbon Border Levy
By Kate Abnett
Background on the Carbon Border Levy
BRUSSELS, Sept 15 (Reuters) - European Union lawmakers voted on Tuesday to scrap a clause that would let the EU suspend its carbon border levy if it makes imported goods more expensive, setting up a clash with member countries who are in favour of the emergency brake.
The EU's carbon border levy, which came into force on January 1, imposes CO2 emissions fees on imports of steel, fertilisers and other goods to ensure they do not have an unfair advantage over products made in Europe, where industries pay for their CO2 emissions.
Parliamentary Vote and Proposed Changes
The European Parliament voted on Tuesday in favour of deleting a clause that would allow the EU to temporarily exempt goods from the levy in future if "serious and unforeseen circumstances" increase the price of those goods. Instead, they proposed using revenue from the border fee to compensate industries if the scheme raises prices.
Negotiations with EU Member Countries
EU countries and the European Parliament will now negotiate the final rules, which will also extend the border fee to new products like washing machines and car parts.
Member States' Position on the Emergency Brake
EU countries want to keep the option to suspend the carbon fee under certain circumstances, including that the price of the product concerned jumps by more than 50% over six months.
Origins and Controversy of the Emergency Brake
The European Commission proposed the emergency brake last year, amid calls from France to suspend the carbon fee on fertilisers to reduce costs for farmers. However, it has proved divisive, with some companies warning this would knock low-carbon investments and hurt domestic industries, which the border levy was supposed to protect from cheaper imports.
Aluminium Loopholes and Sector-Specific Changes
Extension to Smaller Shipments
ALUMINIUM LOOPHOLES
EU lawmakers also voted to extend the carbon border fee to cover smaller shipments of aluminium - 5 metric tons, versus the current 50 tons - a change designed to ensure it applies to imports of high-value, low-weight aluminium parts for cars, doors, and solar panels.
Inclusion of Post-Consumer Aluminium Scrap
They also backed changes to extend the carbon fee to include post-consumer aluminium scrap. This scrap was not initially covered by the levy, prompting concerns among European aluminium firms that foreign suppliers would start using more scrap to dodge the EU border fee and gain a price advantage over European producers.
Industry Concerns
“Our companies will get absolutely eaten alive if these problems aren’t solved,” said Paul Voss, director general at industry association European Aluminium.
(Reporting by Kate Abnett, editing by Inti Landauro, Kirsten Donovan)
