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EU

EU Proposes World's First Carbon Border Tax (reuters.com) 220

Posted by BeauHD from the world's-first dept.
WindBourne writes: EU is going to put a slowly increasing carbon tax on their own goods (source paywalled; alternative source) and is now applying that tax to a limited number of imported items, with more to come. It is expected to have an initial impact on goods from China, India, and Russia, but as this expands, it will likely hit other nations. All of these nations are saying that they will protest at the WTO. While the EU is not as large of an importer as say America, this will have an impact on the globe, hopefully, pushing all nations to at least stop increasing -- if not drop -- their emissions. The tax on imports will apply to carbon-intensive steel, aluminum, cement, fertilizers and electricity and will be phased in from 2026.

"Under the proposal, a transitional phase from 2023-25 will require importers, including those importing electricity, to monitor and report their emissions," reports Reuters. "Importers will be required to buy digital certificates representing the tonnage of carbon dioxide emissions embedded in the goods they import. The price of the certificates will be based on the average price of permits auctioned each week in the EU carbon market."

"If importers can prove, based on verified information from third country producers, that a carbon price has already been paid during the production of the imported goods, the corresponding amount can be deducted from their final bill," the Commission said in a factsheet outlining the policy.
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EU Proposes World's First Carbon Border Tax More

EU Proposes World's First Carbon Border Tax

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  • It sux, but lead from the front (Score:5, Interesting)

    by rmdingler ( 1955220 ) on Wednesday July 14, 2021 @09:22PM (#61583573) Journal

    Like a lot of the World, Usians have several regions (States, colloquially) with economies seriously dependent on traditional fossil fuel production. Like the coal producers before them, this is a bitter pill to swallow... yet like diarrhea inducing antibiotics, it is necessary medicine to swallow.

    Sell it the fossil fuel dependent folks like this: you've got two or three decades to wean your economies off of this, depending on alternative energy advancements. Enjoy the short play.

    • you've got two or three decades to wean your economies off of this, depending on alternative energy advancements.

      From TFS:

      a transitional phase from 2023-25 will require importers, including those importing electricity, to monitor and report their emissions

      If you're gonna use time travel to talk to the '90s at least warn them about 9/11 and Covid-19.

      • It says they will need to start monitoring and reporting their emissions by 2023-2025, letting them ascertain the size of the taxes that will be phased in beginning in 2026 and increase for two or three decades until they become untenable. You're looking at 2026 as the end point instead of the beginning.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      I'm from a place that's highly dependent on fossil fuel production (not in the US). Carbon reduction was a golden opportunity for such places. Flush with capital from fossil fuels, they could have invested in developing wind, solar and next generation nuclear technologies, but they mostly didn't.

      The fossil fuels were always going to run out. Smart producers recognized that and planned for the future. Most sold off their resources at bargain prices in exchange for some dirty and dangerous jobs to keep their

      • Fossil fuels are not going to run out. And we will be using them for a long time to come for plastics, lubricants, fertilizer, etc., even if we stop using them for energy generation.

        • Re: (Score:2)

          by q_e_t ( 5104099 )

          Fossil fuels are not going to run out.

          They will, unless we stop using them, as they are finite.

  • Will be rorted by China (Score:4, Insightful)

    by countach ( 534280 ) on Wednesday July 14, 2021 @09:30PM (#61583595)

    China will "charge" its steel producers a carbon fee, then give it back to them in subsidies. Another pipe dream from the Eurocrats.

    • Re:Will be rorted by China (Score:5, Interesting)

      by Freischutz ( 4776131 ) on Wednesday July 14, 2021 @09:58PM (#61583647)

      China will "charge" its steel producers a carbon fee, then give it back to them in subsidies. Another pipe dream from the Eurocrats.

      The plan is for the EU, not China, the EU to charge import fees on Chinese products that cause excessive CO2 emissions. All China can do about that is subsidise these products to compensate the polluting manufacturers and thus cancel the EU tolls and maybe take out their fury on imports of EU made products using crossover sanctions. That is a nice strategy, but the EU can jack those tariffs up to anything they want which the CCP government then has to match and for all their wealth there is a limit to how much they can subsidise every single industry in China. Furthermore China has its hands full feuding with the US, they are none too keen to add to their troubles by starting a feud with the EU as well since they currently still have a reasonable relationship with the EU. Eventually it will just be cheaper and less of a pain in the butt for China to retire the coal and nat gas fired power plants. Winding down fossil fuels creates new and more future proof jobs than propping up old industries that use obsolete technologies and on the whole that is a net plus for Chinese society rather than the net minus of subsidising fossil fuel power, particularly coal. When push comes to shove I'm pretty sure that the Chinese communists will turn out to be nowhere near as ideologically wedded to propping up obsolete tech like coal fired power plants as the US Republicans are, for the latter it's almost a religion.

      • Re:Will be rorted by China (Score:5, Interesting)

        by Geoffrey.landis ( 926948 ) on Wednesday July 14, 2021 @10:29PM (#61583685) Homepage

        China will "charge" its steel producers a carbon fee, then give it back to them in subsidies. Another pipe dream from the Eurocrats.

        The plan is for the EU, not China, the EU to charge import fees on Chinese products that cause excessive CO2 emissions.

        You didn't read to the end of the summary. It said:

          "If importers can prove, based on verified information from third country producers, that a carbon price has already been paid during the production of the imported goods, the corresponding amount can be deducted from their final bill".

        The OP said that China can game the system by making manufacturers pay a carbon price (and thus, the EU will not charge a carbon price), but then counterbalance that price in the form of an equal amount of subsidy.

        • This, or the next large skyscraper or manufacturing plant will just be built in china itself. They have an economy now. Made faster because of measures like this.

        • Re: (Score:2, Interesting)

          by ShanghaiBill ( 739463 )

          China is installing renewables faster than any other country.

          China's per capita CO2 emissions are lower than the EU's, despite the EU "offshoring" much of their manufacturing emissions.

          List of countries by CO2 emissions per capita [wikipedia.org]

          • Re:Will be rorted by China (Score:5, Informative)

            by bluegutang ( 2814641 ) on Thursday July 15, 2021 @02:09AM (#61583927)

            That is false. Wikipedia's statistics are a decade out of date (and they say so). Since 2012, the EU's emissions per capita have been lower than China's [worldbank.org]

          • Re: (Score:3)

            by AmiMoJo ( 196126 )

            This will make China step up anyway, just like they did with RoHS. The EU market is too valuable to ignore.

          • despite the EU "offshoring" much of their manufacturing emissions.
            The EU is not "offshoring" any manufacturing emissions. You are mixing up EU with USA.

            The EU mainly imports from China agrarian products, like exotic fruits or grains.

            Except for stuff that Foxcon produces in China and then gets sold by Samsung: you hardly find anything here that has anything to do with China.

            • Re: (Score:2)

              by q_e_t ( 5104099 )

              The EU mainly imports from China agrarian products

              Laptops, servers, etc. are now vegetables???

          • China is installing renewables faster than any other country.

            China is also building more nuclear power plants than any other country.
            https://www.statista.com/stati... [statista.com]

            In the 1970s, during the peak of nuclear power plant construction in the USA, the number of new plants coming online would average one gigawatt scale nuclear power reactor every month. Since a nuclear power plant takes about 6 to 8 years to build, which is by the way also the average build time for a coal or natural gas power plant of similar size, that means the USA had dozens of nuclear power plants u

            • China is slowing its adoption of nuclear. Some projects have been canceled. Nuclear makes little sense when the price of solar and wind is declining, and demand for power is below expectations.

              Nuclear power in China - Future projects [wikipedia.org]

              • Nuclear makes little sense when the price of solar and wind is declining, and demand for power is below expectations.

                Subsides for wind and solar were justified with the goal of lowering costs. Why not subsidize nuclear power to lower costs? Nuclear power is already lower in CO2 emissions than wind and solar. Isn't the goal to lower CO2 emissions? Why leave out nuclear power when it is so low in CO2 and quite safe?
                https://ourworldindata.org/saf... [ourworldindata.org]

                Looking at the chart on this web page from the IEA we see that nuclear power is lower cost than many other options. If you can cite other sources that show nuclear power to b

                • Re: (Score:2)

                  by q_e_t ( 5104099 )

                  Nuclear makes little sense when the price of solar and wind is declining, and demand for power is below expectations.

                  Subsides for wind and solar were justified with the goal of lowering costs. Why not subsidize nuclear power to lower costs?

                  It's already massively subsidised.

          • Re: (Score:2)

            by ceoyoyo ( 59147 )

            And China manufactures most of the solar panels. China probably sees this tax as a big competitive advantage over less developed countries encroaching on their manufacturing market share.

        • China will "charge" its steel producers a carbon fee, then give it back to them in subsidies. Another pipe dream from the Eurocrats.

          The plan is for the EU, not China, the EU to charge import fees on Chinese products that cause excessive CO2 emissions.

          You didn't read to the end of the summary. It said:

          "If importers can prove, based on verified information from third country producers, that a carbon price has already been paid during the production of the imported goods, the corresponding amount can be deducted from their final bill".

          The OP said that China can game the system by making manufacturers pay a carbon price (and thus, the EU will not charge a carbon price), but then counterbalance that price in the form of an equal amount of subsidy.

          For one thing you are confidently assuming the EU will allow China to get away with that. But even if the EU does look the other way if China does what you outline that still leaves the Chinese state with a massive financial burden of subsidising obsolete technologies when they could be investing that money in more modern and future proof technologies. You are simply reinforcing the point I was trying to make, presumably because you didn't read my comment to the end or you simply didn't understand the simpl

        • You didn't read to the end of the summary. It said:

          "If importers can prove, based on verified information from third country producers, that a carbon price has already been paid during the production of the imported goods, the corresponding amount can be deducted from their final bill".

          The OP said that China can game the system by making manufacturers pay a carbon price (and thus, the EU will not charge a carbon price), but then counterbalance that price in the form of an equal amount of subsidy.

          In general, this is the most sensible climate change proposal I've heard in years. I don't like giving governments more tax revenue or using taxes to nudge behavior just in principle. I'm open to making an exception in this case.

          The concern I have, and it's a big one, is that the bookkeeping requirements may be enormous. Say I import a laptop assembled in China to Germany. I have to track where all the components were manufactured (screens, case, motherboard, solder, chips, and so forth) and whether they've

      • If Chinese steel becomes expensive enough due to taxes/tariffs, then the EU will have to make their own expensive steel. That might make those EU made automobiles uncompetitive, for just one example.

        This all trickles down to the consumers in the end. All costs are passed on to them. The intent is to reduce peoples standard of living by making everything more expensive. Once people start feeling that pressure in their wallets these grandiose plans may fall by the wayside as politicians are replaced.

    • China will "charge" its steel producers a carbon fee, then give it back to them in subsidies. Another pipe dream from the Eurocrats.

      You and your daughter can stand at the checkout exchanging $20 notes all day. At some point if you want dinner you'll need to actually hand money to the cashier, and they won't be giving it back to you.

      • Re: (Score:2)

        by Aczlan ( 636310 )

        China will "charge" its steel producers a carbon fee, then give it back to them in subsidies. Another pipe dream from the Eurocrats.

        You and your daughter can stand at the checkout exchanging $20 notes all day. At some point if you want dinner you'll need to actually hand money to the cashier, and they won't be giving it back to you.

        Except that the allegation is that your daughter pays you $20, you give your daughter a receipt saying that she paid a $20 "carbon emissions fee" for dinner, the waiter DOESN'T charge her the extra $20 "carbon emissions fee" and you then gift your daughter $20.

        Aaron Z

        • Except that the allegation is that your daughter pays you $20, you give your daughter a receipt saying that she paid a $20 "carbon emissions fee" for dinner, the waiter DOESN'T charge her the extra $20 "carbon emissions fee" and you then gift your daughter $20.

          Aaron Z

          Except the waiter can see your fraud happening right in front of him. The allegation is pointless and would be trivially uncovered and quickly and effortlessly lead to "nice receipt you have there young girl, you're paying full price anyway".

          • Except you (the EU) are the buyer. You can jack up the price as much as you want, since you are paying the bill.

            We all laughed when Trumps tariffs simply increased prices for US consumers. This is no different.

    • China will "charge" its steel producers a carbon fee, then give it back to them in subsidies.
      Does not change the fact that suddenly CO2 heavy steal from China gets expensive in Europe.

      Another pipe dream from the Eurocrats.
      And you are just an idiot.

      • Does not change the fact that suddenly CO2 heavy steal from China gets expensive in Europe.

        Yes. In short, Europe pays more for steel, wherever it comes from. Summarizes it succinctly.

  • Yeay! (Score:4, Insightful)

    by Rei ( 128717 ) on Wednesday July 14, 2021 @09:59PM (#61583651) Homepage

    I've been advocating for a "CAT" (Carbon-Added Tax, carbon equivalent of VAT) for like 1 1/2 decades now. It basically lets you tax your carbon emissions (or other pollution) withour economically disadvantaging yourself in trade, just like VAT does with non-carbon-based taxes. VAT has survived WTO scrutiny so CAT should as well.

    Tax carbon within the CAT zone. Rebate it at the border to non-CAT countries. Carbon-tax goods entering the zone, same as in-zone countries get taxed.

    • Except for...

      "If importers can prove, based on verified information from third country producers, that a carbon price has already been paid during the production of the imported goods, the corresponding amount can be deducted from their final bill," the Commission said in a factsheet outlining the policy.

      I don't think I need to point out the potential problem when the producer is verifying their own carbon emissions.

      • Re: (Score:2)

        by swilver ( 617741 )

        I think you might misunderstand what verified means. Nowhere does it say they can do their own verification. The verification will no doubt be held to stricter standards than "I said so".

    • This is how all trade regulation differences should be done.

      Even things like labor law differences. If say China has a lower labor laws than the United States for example, then a way to think about it is that US workers are legally prohibited from competing with Chinese workers.

      You can either ban trade with countries with significantly different labor laws or adjust the cost of imported goods via some kind of tax/tariff. It's never going to be perfect, but you can do a best approximation. Pushing greater go

  • Trump would be proud.

    Of course, the need for this has been obvious for decades, but I guess the establishment had to get itself entirely wrapped around the "climate change" axle before it occurred to them.

    Whatever it takes...

    • Re: (Score:2)

      by q_e_t ( 5104099 )

      Trump would be proud.

      Of course, the need for this has been obvious for decades, but I guess the establishment had to get itself entirely wrapped around the "climate change" axle before it occurred to them.

      It's been discussed in the EU for about two decades and steps were taken towards it about a decade ago, but stopped short of this final step. The issue isn't it having 'occurred to them', but rather sufficient political will to implement it.

    • Re: (Score:2)

      by realxmp ( 518717 )
      Not at all, tariffs don't affect your own goods. If you impose the same costs on your own goods then it is neither a tariff or a trade barrier. Similar to how the EU imposes VAT on foreign made goods but also on domestic.
  • I am sure Russia, China and so on are about to invent carbon-free cement production method or at least on paper.

    • Yes, sarcasm aside, that is known in economics as "substitution of resources".

      If manufacturing techniques that use a resource become expensive, manufacturers find techniques that don't.

    • The kiln [worldcemen...iation.org] is where the most CO2 comes from. So all the Russians need to do is invent the nuclear powered kiln.

      • Even a nuclear powered kiln would have high carbon emissions.

        Much/most of the CO2 doesn't come from the fuel, but from the fact that the heat is being applied to "burn" the carbon out of limestone (CaCO3) to produce calcium oxide (CaO), one of the primary ingredients in cement.

        • Re: (Score:2)

          by ceoyoyo ( 59147 )

          That's a wonderful place for carbon capture: https://www.dezeen.com/2021/07... [dezeen.com]

          Or you could develop less carbon intensive cement: https://cen.acs.org/materials/... [acs.org]

          Or both. The point of a carbon tax is to provide an incentive for the market to figure out how to do it as efficiently as possible.

          • Absolutely, a carbon tax likely the most sane way to let the market back efficient solutions, and a carbon "tariff" seems like a necessary correction to maintain fair trade with nations that don't have one.

            Because, at least for the foreseeable future, the problem with virtually all low-carbon production is that it's expensive enough that it's not cost-competitive with current methods.

      • Re: (Score:2)

        by chefren ( 17219 )
        There is a project ongoing between a large energy company in Sweden and a large Swedish steelworks company with factories in Sweden and Finland. The goal is to switch the melting process to using hydrogen produced using CO2-free renewable energy. If everything works out, this project alone will drop Sweden's CO2 emissions by 10% and Finland's by 7%. Obviously investments like this are not quick, currently they are making a smaller proof-of-concept plant: https://www.bloomberg.com/news... [bloomberg.com] But considering c

    • You mean like burning old tyres instead of coal in cement kilns?

      This is a thing that happens in the EU (and UK) partly as a result of the EU banning disposal of tyres in landfills.

      Funny thing though is that the cement plants have been having a little bit trouble meeting the emissions laws, because waste incineration emissions are much much tighter than fuel burning ones. So overall it (a) reduces carbon out, (b) removes tens of millions of tons of waste from the landfill stream and (c) burns cleaner.

    • I am sure Russia, China and so on are about to invent carbon-free cement production method or at least on paper.
      Neither of them exports cement to the EU. That would not make any sense at all.
      Did you ever see an "cement train" on a rail road? I certainly not.
      Or a container ship full with containers of cement?

  • With it's 5.3L engine, you'll have to pay at least 5 billion in carbon tax.

    • Re:A Hummer will be unaffordable (Score:4, Interesting)

      by JaredOfEuropa ( 526365 ) on Thursday July 15, 2021 @02:27AM (#61583943) Journal
      Some EU countries here already levy a special tax on cars. It's mostly "because we can" and brings in good money, but in recent years it's been tied to CO2 emissions to justify it. For some cars like the Mercedes G Wagen, the CO2 tax exceeds the factory price (not counting the VAT that comes on top). For a Ford F250 dual cab, the extra tax is over €100k.

      • Taxing hydrocarbon burning cars is not a solution to lowering CO2 emissions unless people have viable alternatives. People willing to pay these taxes is showing that there are cases where the alternatives cost more. People will keep paying carbon taxes until there is better way of doing things.

        What are better options? We could see carbon neutral fuels for the hydrocarbon burning vehicles. This is an existing technology which could use some of that tax revenue to help bring this to market. The US Navy c

    • With it's 5.3L engine, you'll have to pay at least 5 billion in carbon tax.

      I've never seen a hummer in Europe. Just never. I've seen some Dodge RAMs and Ford F250s, but only on farms which makes sense because even if you could navigate a European city road with one you can't park it anywhere.

      • With it's 5.3L engine, you'll have to pay at least 5 billion in carbon tax.

        I've never seen a hummer in Europe. Just never. I've seen some Dodge RAMs and Ford F250s, but only on farms which makes sense because even if you could navigate a European city road with one you can't park it anywhere.

        I know a guy in Germany who drives a Chevy Suburban. He has to get creative with parking, but he manages. I'm not claiming this is a sensible choice, but it's not impossible.

  • Depending on how high that carbon tax is, it might bring back manufacturing to Europe. We'll see.

    • It will be good if it starts to represent the carbon use of goods consumed. "Look, we're so clean and carbon-free!" sounds great for Europeans (and other developed countries) until you add in "because we've shipped all the dirty manufacturing to other jurisdictions and merely consume the finished goods."

    • it might bring back manufacturing to Europe.
      That is a stupid sentence. Europe is still world champion in manufacturing .... sigh, how stupid people are is beyond me.

  • Blockchain (Score:3)

    by VeryFluffyBunny ( 5037285 ) on Thursday July 15, 2021 @04:45AM (#61584145)
    Does this mean that blockchain will be taxed accordingly? Please?

  • An explanation of the problem in under 20 minutes: https://www.ted.com/talks/davi... [ted.com]
    That's less than 10 minutes if you can keep up at 2x playback.)

    Taxes may free up more capital for low carbon energy like nuclear power but that capital means nothing if the regulations in the nation is demanding energy that is more expensive, more dangerous, and with higher CO2 emissions.
    Cost estimates are here: https://www.iea.org/reports/pr... [iea.org]
    CO2 emissions and safety estimates are here: https://ourworldindata.org/saf... [ourworldindata.org]
    Th

    • Re: (Score:2)

      by swilver ( 617741 )

      The tax is fine and is there as an incentive to actually make changes to reduce CO2 emissions. It's not the complete picture, and neither is yours.

      The tax is good because if there currently are two ways to produce something, one emits a lot of CO2 and the other doesn't and they happen to be equally expensive, then there currently is 0 incentive to pick the more climate friendly option. By taxing emissions at least these choices become more clear. By raising the tax higher, other options become more viabl

      • Re: (Score:2, Interesting)

        by MacMann ( 7518492 )

        The tax is good because if there currently are two ways to produce something, one emits a lot of CO2 and the other doesn't and they happen to be equally expensive, then there currently is 0 incentive to pick the more climate friendly option.

        The cost estimates I linked to before show that nuclear power is already a lower cost option than coal and quite often lower than natural gas. Banning nuclear power is artificially making it more costly, as in it is infinite cost. Carbon taxes do not change the actual cost an economy bears on using fossil fuels, it is taking money out of one pocket and putting it in another pocket. Taxing fossil fuels incentivizes lowering the costs of fossil fuels as much as it incentivizes the search for alternatives.

  • EU taxing itself (Score:3)

    by tomhath ( 637240 ) on Thursday July 15, 2021 @10:16AM (#61584933)

    "Importers will be required to buy digital certificates representing the tonnage of carbon dioxide emissions embedded in the goods they import. The price of the certificates will be based on the average price of permits auctioned each week in the EU carbon market."

    Which will result in a higher price for the goods...which will ultimately be paid by the consumer. So no cost to the country of origin.

    "But wait" you say "another country that doesn't have to pay as much for a permit can compete better." Perhaps, but the price still goes up for consumers.

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