European Union countries have supported a proposal to reduce the scope of the Carbon Border Adjustment Mechanism (CBAM) - the world's first tax on carbon emissions from imports. This is reported by Reuters, writes UNN.
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According to reports, the tax will only apply to 10% of companies currently covered by the scheme - those responsible for more than 99% of all emissions under the policy.
Their approval makes it highly likely that the EU will exempt most of the 200,000 importers who were to face the world's first carbon border tariff from next year.
It is reported that the EU's carbon border tariff is designed to protect European producers from cheaper competitors in countries with less ambitious climate laws. It will introduce a duty on imported goods equivalent to the price of carbon already paid by EU companies under the bloc's CO2 emissions policy.
Under the changes, the carbon border tariff will apply to companies importing more than 50 metric tons of goods per year, including steel, cement, aluminum and fertilizers.
This will replace the existing rules, under which all individuals or companies importing such goods worth more than EUR 150 (USD 170) would have to pay the fee from next year.
Starting in 2027, companies will have to purchase permits to cover carbon emissions from imports from 2026.