Russia on Wednesday (26 August) voiced fears over EU plans for carbon taxes on imports from countries outside the bloc, a move that would hit hard a country heavily dependent on hydrocarbons trade.
Former president and prime minister Dmitri Medvedev — now deputy head of Russia’s Security Council — warned of “very serious consequences for the Russian economy” if the tax went ahead in comments reported by news agencies.
He added that the energy and chemicals sectors could suffer particularly along with fuel and coal exports.
Medvedev said the Russian Academy of Sciences had estimated losses running into billions of euros as the EU looks to bolster its competitive advantage with its ‘green deal’ to tackle climate change by taxing imports based on their carbon emissions.
Seeking to overcome damage dealt to its economy by the coronavirus, the EU recently announced a €750 billion stimulus plan which will be used in part to reach carbon neutrality targets. The carbon tax is slated to come on stream from 2023.
But Medvedev slammed the idea as “latent protectionism … which will hamper access of (Russian) merchandise to the EU market.” He said Moscow wants a bilateral approach with Brussels and international organisations such as the WTO.
Russia is a major exporter of raw materials and hydrocarbons, notably to Europe — the country was the bloc’s third largest partner for imports in 2018, according to Eurostat.
Moscow is already reeling from US secondary sanctions affecting its controversial multi-billion Nord Stream 2 gas pipeline, which was set nearly to double Russian gas shipments to Germany, Europe’s largest economy.
German energy company Uniper, a project financier, warned earlier this month the project could potentially unravel.
In the meantime, Russian President Vladimir Putin has set a target of ramping up non-hydrocarbons exports by at least 70% by 2030.