EU levies to reduce emissions in order to meet the target of cutting carbon emissions. The European Union’s “Fit For 55” package consists of legislative proposals focusing on reducing carbon emissions by 2030.
The new regulatory framework for reducing emissions in the EU has been proposed by its parliament. It suggests that changes are required in the Emissions Trading System (ETS) and new levies on the EU’s imports under the Carbon Border Adjustment Mechanism (CBAM).
New EU Levies On Sectors
The proposal under the “Fit For 55” package and the CBAM, the EU’s parliamentary authorities will initially apply the changes and impose a ‘carbon price’ on imports of high-carbon commodities imported from other countries, belonging to different industries.
- Iron and Steel
The first line of commodities belonging to the iron and steel industry is being imposed with the new EU levies to reduce carbon emissions. As seen in the data below, the imports of iron and steel have been rising continuously and frequently since Q1-2021.
The second line of commodities met with the new import levies from the EU belongs to the aluminium industry. The imports of aluminium in the EU, like the iron and steel imports shown above, have been rising continuously with minor increases.
The third line of commodities on which the EU has imposed its new levy belongs to the manufacturing sector, and the commodity is “cement”. The imports of cement to the EU have fluctuated but stood at a high import value of $845.9 million with frequent surges.
The fourth line of commodities being imposed with the new EU levies belongs to the agricultural sector, named “fertilizers”. The quarterly imports of fertilizers have fluctuated since Q1-2021 and stood at a value of $6.6 billion in Q2-2022 with a 14% fall (QoQ).
The fifth commodity that is being imposed with the new levies from the EU belongs to the energy sector—“electricity”. The total imports of electricity in the EU since Q1-2021 show growth till Q1-2022. However, in Q1-2022, the imports fell by 11% on a QoQ basis.
The imposed new EU levies on the imports of high carbon-emitting commodities will help the union to meet the target of reducing carbon emissions by 2030. The European Union have been putting various measures and introducing new methods to prevent the high values of carbon emitted into the environment through a long line of commodities that threatens climate change.