The European Union has initiated the first phase of a groundbreaking system to impose CO2 emissions tariffs on various imported products, including steel, cement, and more
This innovative tariff system aims to prevent environmentally harmful foreign goods from undermining the EU's transition to green and sustainable practices
The announcement of this planned tariff has raised concerns among trading partners, with China's top climate envoy, Xie Zhenhua, urging against unilateral measures like the EU levy
The actual collection of CO2 emission charges at the EU border is set to commence in 2026, giving affected industries time to prepare
However, the initial phase of the Carbon Border Adjustment Mechanism (CBAM) has begun, requiring EU importers to report greenhouse gas emissions associated with certain imported products
These emissions are associated with the production of items such as iron, steel, aluminum, cement, electricity, fertilizers, and hydrogen
Starting from 2026, importers will be required to purchase certificates to offset these CO2 emissions, leveling the playing field between foreign and EU industries
The primary objective is to encourage global adoption of greener production methods and prevent European manufacturers from relocating to countries with lower environmental standards
Additionally, the CBAM is designed to protect EU industries from losing competitiveness to foreign rivals while they work to achieve the EU's emission reduction targets