Merkel and Macron urge introduction of EU carbon border tax

Germany and France have thrown renewed weight behind calls for an EU-wide carbon border tax, which would apply for products imported from countries with lower emissions reduction standards. Speaking at a joint press conference with French President Emmanuel Macron near Berlin, German Chancellor Angela Merkel said there was “a common position” that the bloc needs such a mechanism. “If we have very ambitious climate protection targets, then we must also protect ourselves, as it were, against those who import products to us that are more harmful to the climate or emit far more CO2,” she said. President Macron again announced his support for the tax earlier in the day. Both countries have previously said that they would jointly explore ways to implement such a tax. Merkel said it would be no easy task, as others have pointed out. The system must be compatible with World Trade Organisation (WTO) rules, she added, and the border tax would have to go hand-in-hand with an instrument that ensures EU industries can remain competitive, “such as compensating energy-intensive industries for the price of electricity”.   

The European Commission proposed the introduction of a carbon border adjustment mechanism for selected sectors in December as part of its Green Deal. The aim is to prevent big emitters, such as heavy industries, outsourcing production to countries with less stringent emission regulation (so-called carbon leakage). It could take the form of a carbon tax on imported goods based on product CO₂ emissions. At the same time, EU exporters would be compensated for EU carbon prices when they send goods outside the bloc. However, the plans have been criticised as protectionist, especially by the US. The European Commission is expected to make a full proposal in 2021.