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Chamber seeking member comments on new EU legislation for a ‘green tariff’

The EU became the first leading economy to legislate for ‘green tariff imports’, it has been announced.  Countries that fail to decarbonise industries, such as iron and steel, face what is effectively a carbon tax.  

The Carbon Border Adjustment Mechanism (CBAM) means that countries which fail to green their industries face a tax that may penalise those hoping to profit from high-carbon activities, and force them to clean up. 

The agreement is still provision but, subject to member state agreements, CBAM’s will come into force on a trial basis from October 2023. Early indicates suggest the system will be applied at first to iron and steel, cement, fertilisers, aluminium, electricity, hydrogen and some chemicals.  Whilst no financial or other penalties will be attached to the EU’s CBAM at first, companies will only be required to report on the emissions associated with the production of the goods they wish to sell.  

In practical terms the CBAM will mean companies importing goods into the EU will be required to buy certificates to cover their embedded carbon emissions. The scheme is designed to apply the same carbon cost to overseas firms and domestic EU industries – the latter of which are already required to buy permits from the EU carbon market when they pollute.

The move is part of the wider EU green deal, a big push to meet the EU’s stringent climate targets.  The EU’s target under the Paris Accord is to reduce net greenhouse gas emissions by at least 55% on 1990 levels by 2030. 

Head of International Trade and Compliance at the Chamber, Anne White said “This legislation puts an additional burden on UK traders dealing with the EU.  Stringent checks will need to be made at all stages of the supply chain to ensure that good imported into the EU met the requirements of the legislation.  There are also financial and time constraints that will need to be considered”.

As the UK considers how to respond, the Chamber is seeking comments on both the legislation and the potential impact it may have on goods supply chains, to help inform HMG.   Of particular interest are those countries trading with high-carbon export industries such as China, Turkey, India and potentially Australia.

The Chamber is keen to hear from businesses relating to the potential long term financial and supply chain impacts, especially as there will be a need to source products from new supplies in different countries in the future.  The Chamber will collate and submit to feedback to both the HMG and the British Chambers of Commerce. 

Comments and views can be sent to Siva Venna


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If you would like a comment from the Chamber or a business in our region please contact our Press Office on 01753 870513

Sarah Irving

Head of Marketing & Communications

Direct dial: 01753 870500

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