EU carbon tariffs are about to be levied, plastic product export companies pay attention!
On the morning of December 12, the European Commission, the European Council and the European Parliament conducted the fourth round of tripartite consultations on the EU Carbon Border Adjustment Mechanism (CBAM, also known as "carbon tariff"). In the early hours of the 13th, members of the European Parliament reached an interim agreement with the Council to establish an EU carbon border adjustment mechanism to address climate change and prevent carbon leakage.
CBAM is one of the core parts of the EU's "Fit for 55" emission reduction plan. In July 2021, the EU released a package of emission reduction plans called "Fit for 55", which includes expanding the EU carbon market, stopping the sale of fuel vehicles, imposing aviation fuel taxes, expanding the proportion of renewable energy, and establishing a carbon border tax, etc. And other 12 new bills, the goal is to reduce carbon emissions by 55% compared with 1990 by 2030.
According to the agreement reached this time, the EU Carbon Border Adjustment Mechanism (CBAM) will be established to make the carbon price paid by EU products under the EU Emissions Trading System (EU ETS) equal to the carbon price of imported goods. This will be done by forcing companies importing into the EU to buy CBAM certificates to pay the difference between the carbon price paid in the producing country and the price of carbon allowances in the EU ETS.
The European Parliament said the law was aimed at incentivizing non-EU countries to boost their climate ambitions and was fully in line with World Trade Organization (WTO) rules. Only countries with the same climate goals as the EU will be able to export to the EU without purchasing CBAM certificates, so the new rules will ensure that EU and global climate efforts are free from carbon leakage caused by shifting production from the EU to other countries.
The bill will apply from 1 October 2023, but there is a transition period in which importers' obligations are limited to reporting.
According to the research report of the World Bank, if the "carbon tariff" is fully implemented, in the international market, Chinese manufacturing may face an average tariff of 26%, and the export volume may decline by 21%. For plastic product export enterprises, this will inevitably increase the production cost of enterprises, weaken the competitiveness of products, and even some enterprises with high pollution and high energy consumption will be eliminated.
The EU is China's second largest export market. Under the background of carbon peak and carbon neutrality in the future, plastic product export enterprises should properly respond to the "carbon tariff" as soon as possible to minimize its adverse effects, so as to ensure long-term and stable development of enterprises .
