Title: The carbon border tax: a key measure of the European Green Deal to combat CO2 emissions
Introduction :
Since October 1, the European Union has implemented a key measure of its European Green Deal: the carbon border tax. The measure aims to encourage businesses to reduce their CO2 emissions by requiring them to pay a tax on carbon-intensive goods imported from abroad. But what is this carbon border tax? How does it work and what are the implications for European businesses? This article will answer these questions and explore this metric in depth.
Definition and operation of the carbon tax at borders:
The carbon border tax, officially called the Carbon Border Adjustment Mechanism (CBAM), is a measure put in place by the European Union as part of its European Green Deal. Its aim is to encourage companies to reduce their CO2 emissions by taxing them on carbon-intensive goods imported into the EU.
Concretely, since October 1, companies that import raw materials such as steel, aluminum, cement, fertilizers, etc., must declare the CO2 emissions generated during their production abroad. From 2026, these emissions will be taxed according to the price of the carbon emitted.
Fight against “carbon leaks” and promote the ecological transition:
This carbon border tax aims to combat “carbon leakage” and promote the ecological transition by encouraging companies to reduce their CO2 emissions. Indeed, many European companies have relocated part of their production abroad to escape the high costs of carbon credits or emissions quotas. By expanding this requirement to offset emissions produced abroad, the carbon border tax levels the playing field and encourages companies to invest in more environmentally friendly technologies.
Implications for European businesses:
The implementation of the carbon border tax will have significant implications for European businesses. On the one hand, they will have to declare the CO2 emissions generated by their imports, which represents an additional administrative burden. On the other hand, from 2026, they will have to pay a tax on these emissions, which will increase their production costs. However, this measure can also be seen as an opportunity to stimulate innovation and develop cleaner technologies, which could benefit these companies in the long term.
Conclusion :
The carbon border tax is a key measure of the European Green Deal aimed at combating CO2 emissions and promoting the ecological transition. By requiring companies to pay a tax on imported carbon-intensive goods, the measure aims to reduce “carbon leakage” and encourage investment in more environmentally friendly technologies. Although it involves additional costs for European companies, it can also be seen as an opportunity to stimulate innovation and improve their competitiveness in a world increasingly concerned about environmental impact.