The European Union (EU) has launched phase one of the world's first ever carbon tariff meant to reduce the climate-warming emissions of industries notoriously difficult to decarbonize.
Companies outside the EU will now be required to report greenhouse gas emissions on imports like cement, steel, iron, aluminum, and fertilizers. Starting 2026, imports that do not meet EU emissions standards will pay an additional fee. In the coming years, the list of tariff-able imports will expand.
The tariff is two-fold: incentivize high-emissions industries to decarbonize more quickly and inspire other countries to establish their own emissions tariffs. If successful, even the most resistant companies would be forced to reduce their carbon emissions.
This new tariff will also level the playing field for EU companies, protecting them from countries with lower environmental standards and cheaper prices.
US bipartisan support for climate legislation is rare, but similar carbon tariffs could result in protecting American jobs and companies, a good outcome for those on both sides of the aisle.
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