Here’s how the EU could tax carbon around the world

The initial tariffs will target steel, aluminum, cement, fertilizer and electricity, all carbon-intensive goods. Under a plan proposed by the European Commission, the EU’s executive body, CBAM will begin with a data collection period from 2023 to 2025, when importers monitor and report tonnes of carbon dioxide emitted from the production of goods they put in. from abroad. From 2026, importers will need to purchase a new type of pollution certificate to reflect those emissions in line with prices on the bloc’s Emissions Trading System, market capitalization and trade to apply. license. This fee may be waived at least in part if the carbon tax has been paid in the country of origin of the good. That’s important, because it prevents the scheme from being seen as an illegal tariff under regulations laid out by the World Trade Organization.