Brussels (Brussels Morning Newspaper) – The European Union, under planned reforms, will exempt more than 80 per cent of European companies from the new carbon border tax, EU tax commissioner Wopke Hoekstra has said.
In an interview with Financial Times, Commissioner Hoekstra said he wanted to limit the carbon border adjustment mechanism (CBAM) to the largest importers and exempt most businesses from the costs of adherence and charges as a component of the bloc’s effort to cut red tape and boost productivity.
Hoekstra further said,
“Less than 20 per cent of the companies in scope are responsible for more than 95 per cent of the emissions in the products.”
“It doesn’t do anything to [diminish] the importance of the climate objectives, but it is a way to make life much easier for a wide range of companies across the continent.”
“It is common sense that if you happen to not be part of the scope, then there’s also little point in having you fill out a lot of paperwork,”
Expressed Hoekstra.
“We’re going to carefully look at the scope,”
Hoekstra stated.
“We’re carefully going to look at the exports. We’re going to do it with an open mind but also knowing that this is not necessarily easy.”
What challenges do EU businesses face under the CBAM trial?
The measure would exempt up to 180,000 of the 200,000 businesses impacted from complying.
European companies have grumbled regarding the complicated and costly form-filling during a trial run of CBAM, which seeks to defend heavy industry in the EU.
It mandates importers in seven domains, including aluminium, steel, iron and fertiliser, to note the carbon scope of their products. The EU will then have to pay the difference in price between emitting carbon in the EU and in the country in which it was made.
Since few countries have EU-style emissions trading schemes or calculate carbon content, the scheme has proved onerous for EU importers. A report in March found that only about 10 per cent of companies in Germany and Sweden expected to report emissions had done so.
According to reports, the steel industry is lobbying for more significant safety. It desires immunity for EU-made goods exported outside the European Union, produced abroad, and reimported into the EU. In addition, the company wants it to cover steel elements such as girders and aircraft parts.
