EU progresses on trade measures to cut emissions

After a provisional deal on an EU carbon border adjustment mechanism earlier last week, legislators agreed on reforms to the EU Emissions Trading System late on Saturday. It remains to be seen how the decisions will play out for Europe’s industries and with its trading partners.

Imports into the EU of iron, steel, cement, aluminium, fertilisers, electricity generation, hydrogen and some downstream iron and steel products such as screws and bolts will be subject to a carbon border tax, agreed by the European Parliament on Tuesday morning. At the same time, free emissions allowances to industrial sectors under the EU Emissions Trading System (ETS) will be phased out by 2034, according to a deal made late on Saturday night.