US could dodge EU carbon tax, says bloc’s climate chief

The United States and European Union flags are pictured during Vice President Mike Pence’s visit to the European Commission headquarters in Brussels, Belgium February 20, 2017. REUTERS/Francois Lenoir

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BRUSSELS, Sept 20 (Reuters) – The United States may be able to avoid the European Union‘s plan to impose tariffs on imports of polluting goods based on similar climate goals, said the EU’s climate change policy chief on Tuesday.

The 27 EU countries are negotiating a plan to introduce the world’s first border carbon tax from 2026, forcing importing companies in the bloc to pay border carbon costs on certain polluting products such as steel, cement and aluminum.

The tax would apply to goods from countries with weaker climate policies than the EU, although the bloc said some countries could be exempted if they had an internal CO2 price similar to what companies EU countries pay under the EU carbon market.

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EU climate policy chief Frans Timmermans said the United States could benefit from the waiver.

“If the United States has the same trajectory as us in terms of reducing emissions, then … the ‘carbon club’ is on the table. Because that means the carbon footprint of a ton of carbon steel United States is comparable to that of the carbon footprint of a tonne of steel in Europe – then you don’t need a carbon border adjustment mechanism,” Timmermans said.

“That’s probably not going to apply with other big trading partners. But between the EU and the US, I’m not afraid that…I think we’re still in parallel,” Timmermans said.

US President Joe Biden has pledged to cut US emissions by at least 50% below 2005 levels by 2030.

The EU has pledged to cut its net emissions by 55% by 2030, compared to 1990 levels – equivalent to a 51% reduction from 2005 levels, according to the Rhodium Group.

The EU levy is designed to avoid “carbon leakage”, where companies relocate to areas with weaker climate policies.

It would cover some goods the US sells in Europe, including steel, aluminum and fertilizers, though researchers expect EU policy to have a bigger impact on countries like China – the world’s largest manufacturer of steel and cement, which has already criticized the EU. to plan.

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Reporting by Kate Abnett Editing by Marguerita Choy

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