In a sign that Moscow has taken note of the EU’s plan to deploy a carbon border tax, a top Kremlin adviser has urged Russia’s business giants to start adapting now if they want to continue selling their wares in the single market.
The European Commission aims to tax imports that do not meet certain green criteria, as part of its drive to decarbonise the economy and protect homegrown industries.
EU officials are currently working on the so-called carbon border adjustment mechanism to make sure it is compatible with World Trade Organisation rules. Finer points related to what products would be targeted are still to be confirmed.
But it is already on the radar of Russia, the world’s fourth-largest emitter of greenhouse gases.
At a press conference on Thursday (6 February), Vladimir Putin’s climate adviser Ruslan Edelgeriev, who has represented Moscow at international summits, urged Russia’s businesses to prepare for life with the border tax.
“The EU wants to push through these regulations not because they don’t like our companies, but so that their own companies don’t overstep emissions targets,” Edelgeriev said.
He added that any businesses unwilling to adapt now would face difficulties once the tax is up and running. The Commission is due to release its proposal in 2021.
Edelgeriev also said that he favours regulation “because if we don’t do it, we will be shut out of external markets”.
Although the EU has hit Russia with specific sanctions after it annexed Crimea in 2014 – which the bloc decided to roll over again in December – trade between the two parties actually increased 2.2% in the first half of 2019, according to Eurostat.
But it is unclear to what extent Moscow will regulate its climate impact further as it only ratified 2015’s Paris Agreement last year and has pledged emissions cuts that most experts have dismissed as weak or non-existent.
A strategy published in January acknowledged that climate change is a reality and listed several measures that Russia can take to benefit from increasing temperatures. Putin has in the past cast doubt on whether climate breakdown is man-made.
The measures include easier access to shipping lanes that were previously unprofitable due to sea ice, lower winter energy bills and making sure exports are compatible with green regulations in other parts of the world.
Russia is not the only country that might be hit with border levies if it does not up its environmental game: the United Kingdom could also find itself in the crosshairs.
Details about the future relationship between the now-former member state and Brussels still need to be hammered out but if London decides to forge its own path on green regulation, the tax could be deployed to protect EU industry.
French MEP Pascal Canfin warned last week that if emissions trading in particular differs greatly, then “we might imagine that we will apply this mechanism to the UK in order to restore the level playing field”.
[Edited by Zoran Radosavljevic]