CRU: Will Carbon Border Tax Adjustments Represent a New Frontier in Trade Policy

LONDON, Nov. 19, 2019 /PRNewswire/ -- The EU ETS scheme is fundamentally altering the economics of metals and fertilizer production in Europe. The current pathway is unsustainable, amid high costs, weak market conditions and intensifying international competition.

In this context, the EU Commission is planning to impose carbon border tax adjustment (CBTA) – a tariff levied on carbon emissions embodied in imported goods into the EU – to "level the playing field". Such measures have significant potential to redraw the competitive landscape for these strategically critical industries. But their ultimate impacts are highly uncertain and substantively dependent on policy and market specificities. What does is mean for your business?

European metals markets under pressure with a fundamental policy shift seeming likely

The EU ETS scheme is fundamentally altering the economics of metals and fertilizer production in Europe. The European carbon price has rallied to over €25 a tonne of carbon dioxide (CO2), and is set to rise higher in the longer term, fundamentally altering the economics of metals and fertilizer production in Europe.

With metal production costs in Europe – already high by international standards in many cases – rising faster than among producers in competing jurisdictions, the future of much of the European metals industries looks uncertain. It is likely that further policy reforms will be required to ensure sustained industrial activity in a higher carbon price world.

The EU Commission is planning to impose CBTA to "level the playing field". The new president of the EU Commission, Ursula Von der Leyen, has made no secret of her plan to introduce a CBTA (a proposal that has long had support of powerful European stakeholders, including the French authorities). Officials are now understood to be drafting guidelines for potential carbon tariffs on steel, cement and power industries. Aluminium, copper and other base metals are also likely to fall under the eye of the policy makers.

Read the full story:
https://www.crugroup.com/knowledge-and-insights/insights/2019/will-carbon-border-tax-adjustments-represent-a-new-frontier-in-trade-policy/ 

Read more about CRU: http://bit.ly/About_CRU

About CRU

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 280 experts and has more than 11 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004 and Singapore in 2018.

When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

CRU – big enough to deliver a high-quality service, small enough to care about all of our customers.

SOURCE CRU

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