Brussels (Brussels Morning Newspaper) – According to draft EU Commission proposals, the European Union will exempt “the vast majority” of firms covered by the EU’s carbon border levy on the grounds that they account for just 1% of emissions in the scheme.
The new policy, which the European Commission is due to propose this week as part of a package of steps to cut red tape for businesses, would drastically decrease the 200,000 importers currently covered by the EU’s world-first carbon border fee, Reuters reported.
According to Reuters, a draft of the EU Commission’s proposal outlined strategies to alter the carbon border levy (known as CBAM) so it only applies to firms importing goods with a mass-based limit of 50 tonnes per year.
“A mass-based threshold reflecting the average emissions intensity of the volume of imported CBAM goods would better translate the climate objective of the CBAM. A threshold set at a level of 50 tonnes will exempt the vast majority of importers from obligations under this Regulation,”
It stated.
The shift would hold more than 99% of the emissions covered by the carbon border levy, the draft revealed. It would supersede the existing CBAM regulations, under which all individuals or firms importing CBAM-covered goods with a value of overhead 150 euros would have to produce the carbon border levy from next year.
Most of the exempted importers are small and medium companies or individual consumers, the draft document stated.
“For those importers, the administrative burden resulting from compliance with CBAM obligations significantly outweigh the environmental and regulatory benefit,”
It revealed.
Why is the EU simplifying carbon border levy regulations?
EU Climate Commissioner Wopke Hoekstra expressed earlier this month the Commission’s analysis had discovered that all of the emissions covered by the carbon border tariff – 97% – are generated by just 20% of the firms under the scheme.
“So would it then not be smart to leave that roughly 80% off the hook, in terms of the administrative work burden? In my view, it would,”
He revealed to a European Parliament committee meeting.
“Our current thinking, where you actually apply a huge burden on companies who would then fill out a lot of paperwork, have a lot of things to do, without any merit – that cannot be the solution,”
Hoekstra stated.
EU Commission President Ursula von der Leyen has promised that the simplification proposals will not dilute Europe’s climate commitments. Under the current regulations, in Germany alone, 20,000 firms that import qualified goods will have to pay the carbon fee, according to industry calculations.
