EU Expands Carbon Border Tariff to Tackle New Imports

The European Union plans to extend its carbon border tariff to include more imported products. This move aims to close a loophole allowing foreign firms to avoid the levy on steel and aluminium products. The proposal will be published soon.

The European Union is set to broaden its carbon border tariff, targeting a wider range of imported goods, according to a draft document leaked to Reuters. The initiative seeks to address current policy gaps that enable foreign companies to evade the charge.

The draft European Commission proposal reveals plans to expand the Carbon Border Adjustment Mechanism (CBAM) coverage to reduce carbon leakage risks associated with products further along the value chain of steel and aluminium. This represents an attempt to strengthen environmental regulations and ensure competitiveness of locally produced goods.

Expected for release on Wednesday, the new policy could have significant implications for international trade, affecting the traditional flow of steel and aluminium imports to the EU. The proposal highlights the EU's ongoing commitment to stringent climate measures while maintaining industrial competitiveness.

(With inputs from agencies.)