EU mulls expanded carbon border

Market: Electricity, Emissions, Fertilizers, Metals, Natural gas, Oil products, Petrochemicals
02/02/21

Refineries, paper and aluminium should be covered by the EU's forthcoming carbon border adjustment mechanism, alongside cement, steel, chemicals and fertilisers, say a broad cross-party group of members of the European Parliament.

Parliament's green, liberal, socialist and centre-right groups joined up to table a compromise amendment on the carbon border adjustment measure, which calls on the European Commission to propose, including from 2023, "all" imports of products and commodities covered by the EU emissions trading system (ETS), also when embedded in intermediate or final products.

Given the cross-party support, the parliament's environment committee is expected to adopt the amendment on 4-5 February, thereby setting a position ahead of the commission's formal legal proposal for a carbon border mechanism. And following an impact assessment, the group wants the carbon border to specifically cover the power sector and energy-intensive industrial sectors such as "cement, steel, aluminium, oil refinery, paper, glass, chemicals and fertilisers".

A key question for those sectors that will be covered is whether they can continue to benefit from compensation measures aimed at combating unfair competition by third-country firms not falling under the EU ETS or similar carbon pricing systems.

The committee's Green draftsman, Yannick Jadot, previously called for EU and national compensation for EU ETS costs to "immediately cease" as soon as the carbon border enters into force. Jadot had argued that this was the only way to make the EU's carbon border compatible with World Trade Organisation rules.

But another amendment, with broad cross-party support, now calls for implementation of the carbon border mechanism to go "hand in hand with the parallel, gradual, rapid and eventual complete phase-out of" current measures for EU firms facing competition from exporters in third countries that do not pay carbon costs.

The final legal text for the measure, expected to be proposed by the commission by the end of June, will have to be agreed by parliament with EU member states. EU leaders have called for such a measure to be up and running by 1 January 2023.

The commission is considering three core options for the carbon border measure, for a "few" sectors trading "energy-intensive raw materials internationally". These are an import tax, a new excise duty on carbon-intensive goods and a mechanism in the form of a notional ETS.

By Dafydd ab Iago

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22/11/24

Cop: Brazil eyes $300bn/yr for climate finance goal

Baku, 22 November (Argus) — Brazil has set out a suggestion of "at least" $300bn/yr in climate finance to be provided by developed countries to developing nations. Brazilian representatives set out their proposal today, in response to a draft text on a new climate finance goal. Brazil's proposal of $300bn/yr in climate finance by 2030 and $390bn/yr by 2035 are in line with the recommendations of a UN-mandated expert group. Negotiations at Cop are continuing late into the evening of the official last day of the conference, with no final texts in sight. Discussions centre around the new collective quantified goal (NCQG) — the climate financing that will be made available to developing countries in the coming years to help them reduce emissions and adapt to the effects of climate change. The presidency draft text released this morning put the figure at $250bn/yr by 2035, with a call for "all actors" to work towards a stretch goal of $1.3tn/yr. Representatives of developing countries have reacted angrily to the figure put forward in the text, saying it is far too low. Brazil's proposal appears to call for all of the $300bn-$390bn to be made up of direct public financing, which could then mobilise further funding to reach the $1.3tn/yr. It was inspired by the findings of a UN report, Brazil said. The UN-backed independent high-level group on climate finance today said that the $250bn/yr figure was "too low," and recommended the higher $300bn-390bn/yr goal. Brazil's ask would be a significant step up in the required public financing. The $250bn/yr target includes direct public financing and mobilised private financing, and potentially includes contributions from both developed and developing countries. Wealthier developing countries have been hesitant to see their climate financing fall in this category, which they say should be made up exclusively of developed country money, in line with the Paris Agreement. But $300bn/yr would represent an increase in ambition, Brazil said, while the $250bn/yr called for in the draft text would be very similar to the $100bn/yr goal set in 2009, after taking into account inflation. Delegates at Cop look set to continue discussions into the night. A plenary session planned for late in the evening, which would have allowed parties to express their positions in public, has been cancelled, suggesting groups still have differences to hammer out. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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22/11/24

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22/11/24

Cop: Developing nations reject first finance offer

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Blenders credit extension stalled in US Senate

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22/11/24

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Cop: Decision on 2026 host unlikely in Baku

22/11/24

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22/11/24

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