WTO dispute body agrees to Russia's panel request on EU carbon border levy

The ​World Trade Organization's dispute ‌settlement body ​agreed on Friday to Russia's request to establish a panel examining the European Union's carbon ‌border levy. Russia first initiated the dispute regarding the EU's Carbon Border Adjustment Mechanism (CBAM) last year, arguing the measure - which imposes a carbon charge ‌on certain imports to match the carbon costs faced by European ‌producers - is discriminatory and protectionist, and has asked the WTO to adjudicate whether it violates international trade rules.

Its first request in July this year was ⁠unsuccessful ​but was then accepted ⁠on Friday upon its second request. CBAM is designed to shield European industries ⁠against cheaper imports from countries with weaker climate rules. But it has faced ​criticism from trading partners including Brazil, South Africa and India, who ⁠say it penalises developing economies.

Russia argues CBAM imposes trade barriers for covered goods imported ⁠into ​the EU and also says the EU's offering of allowances to some companies under the Emissions Trading System (ETS) - its ⁠flagship policy for reducing greenhouse gas emissions - amounts to an export subsidy ⁠to strengthen ⁠European competitiveness. The EU has expressed confidence that its measures are compatible with WTO rules and will participate in ‌the proceedings.