Carbon leakage: prevent firms from avoiding emissions rules

8 Mar 2021 03:49 PM

The Parliament is discussing a carbon levy on imported goods to stop companies moving outside the EU to avoid emissions standards, a practice known as carbon leakage.

As European industry struggles to recover from the Covid-19 crisis and the economic pressure due to cheap imports from trading partners, the EU is trying to honour its climate commitments, whilst keeping jobs and production chains at home.

Discover how the EU’s recovery plan prioritises creating a sustainable and climate-neutral Europe

An EU carbon levy to prevent carbon leakage

EU efforts to reduce its carbon footprint under the European Green Deal and become sustainably resilient and climate neutral by 2050, could be undermined by less climate-ambitious countries. To mitigate this, the EU will propose a Carbon Border Adjustment Mechanism (CBAM), which would apply a carbon levy on imports of certain goods from outside the EU. MEPs will put forward proposals during March's first plenary session.

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