The European Union is considering introducing a tariff on carbon, as part of an effort to cut emissions worldwide, and create a level playing field for EU businesses, who already have to pay for carbon emissions, potentially creating a new sticking point in the bloc’s trading talks with Australia, where environmental measures have proven a contentious issue. The carbon tariff proposal was endorsed by the European Parliament’s Environment Committee last week. The cost on importers would be equivalent to that on the European carbon market, which is currently trading carbon permits at a record high A$60 a tonne of CO2 – more than twice the maximum price of the abolished Australian carbon scheme. Data compiled by the Department of Foreign Affairs and Trade says Australia exported $11.7Bn worth of goods to EU countries last financial year. Major exports included coal ($2.7Bn), gold coin ($689M) and gold ($409M).
Hugh Grossman 
Scott Morrison, Prime Minister of Australia
RepuTex’s executive director, Hugh Grossman, said the EU tariff would initially apply to emissions-intensive products not on this list, such as steel, cement, chemicals and fertilisers, but eventually extend to all commodities covered by the EU carbon market. Grossman said the European proposal would require other countries to have an emissions compliance system similar to its own to avoid the levy. He said the Morrison government’s “technology, not taxes” approach of subsidies and research and development funding to encourage emissions cuts would not be enough. The push for carbon tariffs has increased as countries consider how to reach the increasingly shared goal of reducing emissions to net zero by 2050. More than 120 countries, including all G7 members, have some form of mid-century zero emissions goal.
The new Australian trade minister, Dan Tehan, has said carbon tariffs were yet to be an issue in negotiations with the EU on a free trade deal, and criticised the idea “as a new form of protectionism”. Experts have dismissed the idea carbon tariffs are a form of industry protection, saying the rationale is to level the playing field for local businesses acting to cut emissions.
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Europe Enhances its Greenhouse Gas Goals
Source
Big-emitting Australian businesses could soon face costly carbon levy in Europe, The Guardian, 2021-02-11
By Political Correspondent, Lukas Frisch Tonkinson.
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