EU moots border tax to offset costs of climate action

CEMBUREAU President Paul Vanfrachem welcomes the idea, saying that the tax would help offset the competitive disadvantage that the ETS forces on the European cement industry.

"What we are seeing today is [cement] imports increasing a lot, especially imports from China where there is no carbon constraint," says Vanfrachem. 

He believes that "a worldwide effort" on cutting CO2 would be fairer to European businesses. But before such a system is in place, he thinks Europeans "have to take some measures to try to find fair conditions for the competitiveness of the industry". 

"On a temporary basis, and as long as we do not have a worldwide [carbon-trading scheme in place], we are in favour of these kind of taxes," says Vanfrachem.

Although supported by the cement sector, the idea is generally not welcomed by EU businesses. Climate-change expert Daniel Cloquet at UNICE, the European employers' association, expressed the "highest reserves" over the idea, saying that it holds the potential to launch "a commercial war" with the US or China, which do not have cap-and-trade systems.

John Hontelez, secretary-general of the European Environment Bureau, a federation of 143 environmental organisations, says that he supports the idea of a border tax adjustment. "The Commission has picked this up and found it interesting enough to include it in discussions" in the High-level group, he says.

But not everyone at the Commission is supportive. One senior source, who preferred not to be named, said it would not be a good idea "politically".

According to CEMBUREAU, the way forward would be to launch specific emissions- trading schemes at a global level for each industrial sector, instead of following the European model where all industries are treated under the same scheme.

To support this argument, Vanfrachem points to "large discrepancies in terms of the capabilities of different industries to afford" CO2 costs. He cites aviation as a sector which can afford "much higher [CO2 prices] than we could ever afford".

"There is no point having them in the same scheme". 

But here too the idea runs into opposition from the Commission which believes the European system should form "a nucleus" that other countries could join at a later stage. "Let's keep it as one single system," the source said.