Member states of the European Union have agreed to impose a carbon tax, according to a twitter post Tuesday evening by French President Emmanuel Macron.
The new measure will be applied to products imported into the European Union that do not meet EU climate standards in their production.
The agreement follows the proposal by the European Commission in July 2021 for a carbon border adjustment mechanism (CBAM), placing a carbon price on targeted products to avoid “carbon leakage,” a situation in which companies would move production to non-EU countries with less stringent environmental and climate policies. Another stated goal of the proposal is to encourage industries in other jurisdictions to improve the environmental sustainability of their own production processes.
The proposals rules followed a phased-in approach to implementing the CBAM system, initially applying it to a select number of goods with high carbon leakage risk, such as steel, iron, cement, fertilizers, aluminum, and electricity production. The proposed rules would see the system becoming fully operational in 2026.