EU slaps carbon tax on Australian exports

The UK and the European Union (EU) are carbon tax policies designed to force European trading partners to reduce emissions, which could quickly hurt Australia’s exports.

On March 10, members of the European Parliament adopted the following resolution: Support carbon tax, Also known as the “Carbon Border Adjustment Mechanism” (CBAM).

Details will be submitted to Parliament as early as June, covering the electricity sector and energy-intensive industrial sectors such as cement, steel and aluminum.

The EU Parliament said the purpose of the tax is to help the region achieve net zero emissions by 2050, while preventing “carbon leakage” where EU production, which has less stringent carbon emission policies, simply moves abroad. Said there is.

“We need to set an example, but if our company works under these very stringent standards, we also need to prevent these industries from moving to more polluted countries. “Says Michael Pulch, EU’s Australian Ambassador. Told the australian..

Trade Minister Dan Tae-han called the carbon tax a “protective trader,” but Pulch denied it.

Epoch Times Photo
Australian Federal Trade Minister Dan Tehan at a press conference at the Houses of Parliament in Canberra on December 9, 2020. (AAP Image / Lukas Coch)

J├╝rgen Zatler, Director of the German Federal Ministry of Economic Cooperation and Development, Told the guardian The policy will be used as a tool to combat global warming and not to protect domestic industry.

However, Mr. Taehan said he did not want the region to approach the subject in a “proprietary way of being protected and trade-oriented,” and advocated increased trade liberalization.

“We know they already have a heavily subsidized industry,” he told reporters. “What we don’t want to see is that additional protective trade-oriented measures are being implemented.”

Queensland Institute of Technology Associate Professor Felicity Dean said If CBAM is implemented while the EU continues to provide free emissions to some industries, it may be argued that taxes protect domestic producers.

The introduction of taxes will have a major impact on current negotiations on Australia-EU free trade agreements. The EU ambassador said Europe would force Australia to adopt larger emission targets in negotiations.

This can create tension in the relationship between the two parliaments. This is the feeling raised by US Presidential Envoy John Kerry.he Told the Financial Times He was worried about the tax system and warned that it should only be used as a last resort.

“It has serious implications for the economy, relationships, and trade,” Kelly said. “I think it’s a more last resort when we’ve exhausted the potential to reduce emissions and participate in compacts that everyone is burdened with.”

Epoch Times Photo
The Australian and European Union flags will be seen during an event at the German Ministry of Defense in Berlin on Sunday, April 22, 2018. (AAPImage / Lukas Coch)

However, the EU Parliament will face some difficulties in drafting and implementing a carbon tax that complies with the rules of the World Trade Organization (WTO).

Under WTO regulations, the tax on imported products or “fee of all kinds” must be the same as the tax on domestic products. That is, you can impose additional taxes on importers, but not on producers.

If the EU continues its current CBAM program, countries like Australia could lead the WTO dispute on this issue.

“At this stage, the EU has not ruled out its reliance on exceptions. [to comply with WTO rules]This includes benefits to protect the lives and health of humans, animals and plants, as well as the protection of depleted natural resources, “says Felicity Dean. “However, the problem is that these exceptions apply only in narrow situations where CBAM cannot be completely exempted.”