Russia Most Affected by New European Carbon Tax Plan

Image credit: Eurodiaconia

According to a collaborative research by two European climate think tanks, the world’s first carbon border tax planned by the European Union is expected to impact Russia the most while leaving Chinese commerce relatively unaffected, Reuters reports.

In July, the EU proposed a Carbon Border Adjustment Mechanism (CBAM), or CO2 tax, on polluting commodities that would take effect in 2026 and force some firms importing into the EU to pay carbon charges at the border on carbon-intensive items like steel and aluminum.

According to European Commission plans, the CBAM would be implemented in 2023 at the earliest, before being up and running in 2026.

The industries covered by the program account for just around 3.2 percent of all imports into the EU annually, but their carbon footprint is comparable to over half of the free emission permits presently available to European businesses.

Businesses are required to purchase permits to cover their entire emissions under the EU emissions trading scheme. They can sell extra permits to others if they reduce carbon footprint.