EU: Certification system for imports of certain carbon dioxide-intensive goods

ECOFIN agreed to adopt an adjusted version of the EC's proposal for a carbon-border adjustment mechanism.

Certain carbon dioxide-intensive goods

The EU Council of Ministers for Economic Affairs and Finance (ECOFIN) in March 2022 agreed to adopt an adjusted version of the European Commission's proposal for a carbon-border adjustment mechanism. Read the ECOFIN release.

One measure would introduce a new certification system for imports of certain goods from countries outside the EU in an effort to prevent the production of carbon dioxide-intensive products from being relocated to countries with less stringent climate regulations.

  • The adopted compromise proposal would introduce a new form of carbon dioxide certificate for certain imported goods.
  • The carbon-border adjustment mechanism is intended to complement the EU's existing emissions trading scheme by introducing a new carbon dioxide pricing mechanism for goods imported into the EU from third countries.
  • The aim would be intended to reduce the risk of production being moved out of the EU to avoid the EU's emission regulations (so-called “carbon dioxide leakage”).

The regulations are intended to cover goods from certain designated industrial sectors such as:

  • Cement
  • Aluminum
  • Fertilizers
  • Electricity production
  • Iron
  • Steel

Read a March 2022 report (Swedish) prepared by the KPMG member firm in Sweden

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.