European Commission, France flag growing support for carbon border levy

PARIS (Reuters) - Support is building for a European levy on imports from countries with easier carbon emissions standards, senior European Union and French officials said on Tuesday, as the bloc seeks to impose its guidelines on the emissions trading market.

While the EU looks to take the global lead against greenhouse gas emissions, it wants to ensure that companies do not evade its tougher standards by simply boosting production in more lenient non-EU countries.

The European Commission is due to present a proposal in June to require non-EU producers to pay an emissions-based fee to sell polluting goods in Europe, levelling the playing field with EU firms subject to tougher emissions standards.

“We are having discussions with our European colleagues and the foundations for an agreement are building fast,” French Finance Minister Bruno Le Maire said in a speech to a French government-organised online conference.

Along with France, the governments of Austria, the Czech Republic, Denmark, Lithuania, Luxembourg, Slovakia and Spain on Tuesday published an op-ed piece on news website Politico calling for an EU carbon border adjustment mechanism from 2023.

To avoid falling foul of World Trade Organisation rules and sparking retaliatory sanctions, the levy would have to be applied in way that does not discriminate between importers based on their origin.

One way of finding some traction could be by requiring importers to pay an emissions allowance at the border based on the price of the bloc’s existing emissions trading system.

“Although we have not made our choice yet, there is some convergence towards an option mirroring the EU emissions trading system,” EU Economics Commissioner Paolo Gentiloni told the conference.

Paris, which has long championed a carbon border levy, favours a transitional phase until 2030 to phase out free emissions allowances for some EU companies.

Reporting by Leigh Thomas; Editing by Richard Chang