EU Parliament Votes to Remove Emergency Brake from Carbon Border Levy
The European Parliament voted to scrap a clause allowing the EU to suspend its carbon border levy if imported goods become more expensive.
European Union lawmakers voted on Tuesday to remove a clause that would allow the bloc to suspend its carbon border levy in the event that it drives up the cost of imported goods, opening a dispute with member countries that want to keep the option.
The carbon border levy took effect on January 1. It places CO2 emissions fees on imports of steel, fertilisers and other goods, aiming to prevent them from gaining an unfair advantage over European-made products, whose manufacturers already pay for their emissions.
The clause under debate would have let the EU temporarily exempt goods from the levy if "serious and unforeseen circumstances" pushed their prices higher. The European Parliament voted to delete it, proposing instead that revenue from the border fee be used to compensate industries if the scheme raises prices.
EU countries take a different view. They want to retain the ability to suspend the carbon fee under certain conditions, including a situation where the price of the product concerned rises by more than 50% over six months.
The European Commission had proposed the emergency brake last year, following calls from France to suspend the carbon fee on fertilisers in order to lower costs for farmers. The idea has since proved divisive, with some companies warning that such a suspension would undermine low-carbon investments and harm domestic industries — the very sectors the border levy was designed to shield from cheaper imports.
Negotiations between EU countries and the European Parliament will now determine the final rules. Those rules are also expected to extend the border fee to new products, including washing machines and car parts.