Policy briefing: the carbon border tax

A key promise made by incoming European Commission president Ursula von der Leyen, a carbon border tax would protect EU industries producing goods in a less carbon intensive way than their international competitors. ENDS takes a look at what the proposal might mean in practice.

What is being proposed?

In essence, a border tax would make up the difference between the EU’s carbon price, applied to heavy industry through the emissions trading scheme (ETS), and lower or non-existent carbon prices levied in third countries.

In her mission letter to incoming trade commissioner Phil Hogan, who has been tasked with working up the proposal, von der Leyen stressed that the scheme would allow European companies to compete “on a level playing field” internationally.

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