By 2021, the European Union plans to put forth a proposal to levy a carbon border tax on products, including steel imported into the 27 blocs under it. The tax could come into existence by 2023. In an online event by the media company Politico, a panel discussed the plan from words to action. The EU could subsequently levy the tax even on aluminium, according to Diederik Samsom, head of the Commission’s climate cabinet.
The proposal, however, could run into a roadblock should the apex trade body, World Trade Organization (WTO) tag it as a ‘discriminatory’. The commission, however, plans to design the policy in a way that would create a level-playing field for all global participants. The move could benefit European steelmakers, including ArcelorMittal, which needs to bear additional costs, considering the European carbon leakage standards. The policy could save European producers from dumping injury caused by lower-priced imports from countries with lax carbon emission standards.
Panelists at the discussion also pointed out that the policy should ensure that exporters do not send their clean steel to Europe, thereby surpassing this carbon tax, while utilizing the ‘dirty’ steel in the producer’s domestic market or by exporting it to other countries.