While the EU carbon tax should be introduced at the bloc’s borders by 2022, a report details the challenges and options of this mechanism, which still has many grey areas. EURACTIV France reports.

The carbon border tax is one of the highlights of the European Commission’s Green Deal, and should be presented around June 2021 in view of implementation the following year. However, there are many uncertainties surrounding the contours of this mechanism, which is supposed to preserve Europe’s competitiveness by preventing “carbon leakage”, where companies relocate to countries with lower pollution costs.

In a report published on 30 September and backed by the French and German governments, the European Roundtable on Climate Change and Sustainable Transition (ERCST) stated that the challenge is “closely linked” to the EU’s increased climate ambitions. The stakes are high because, in addition to the objectives of the Green Deal, the Commission would like to allocate the revenues from this future tax to the Next Generation EU recovery plan, endowed with €750 billion.

The European Parliament had endorsed this possibility in a plenary vote on 16 September, maintaining its position on “the need to introduce new sources of revenue into the EU budget.” MEPs had also called for a legally binding timetable for their introduction, insisting that “the financing of the recovery must be sustainable through, for example, the introduction of taxes on transnational polluters.”

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