The Minerals Council of Australia (MCA) has cautioned about the imposition of a carbon tariff on imported materials, following the European Commission’s (EC’s) adoption of a proposal for a new Carbon Border Adjustment Mechanism (CBAM).
The CBAM will result in the imposition of a carbon price on specified imported products so that ambitious climate action in Europe does not lead to “carbon leakage”, thus ensuring that European emission reductions contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe.
The EC noted that the CBAM was also aimed at encouraging industries outside the European Union (EU) and its international partners to take steps in the same direction.
The CBAM will equalise the price of carbon between domestic products and imports and ensure that the EU’s climate objectives are not undermined by production relocating to countries with less ambitious policies, the commission said.
MCA CEO Tania Constable noted this month that achieving net-zero emissions required a concerted effort to adopt new technologies, not trade protection.
She noted that the proposed EU CBAM was essentially a tax on imported energy-intensive products.
“Proposals to tax imports of iron, steel, aluminium, cement, fertiliser and electricity under the current proposal need to fairly take into account different ways other countries are managing the reduction of carbon emissions in their economies.
“Australia has a good story to tell. Australia is leading the world in the uptake of renewable generation, ten times the world average, according to the Australian Energy Market Operator.