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HNewsWire: Do you want to pay a carbon tax To Satan Soldiers every time you switch on your heater? What about every time you fill up your car's petrol tank? Surprisingly, this will soon be the norm in Europe. When I initially heard that the EU intended to levy direct carbon taxes on people, I assumed it was just another bogus Internet story. However, it is not a fake rumor. It is being covered in European news outlets, and you can learn more about it on the European Parliament's official website.

Governments in the European Union have agreed to the world's first big carbon border tax as part of an update of the bloc's centerpiece carbon market, which seeks to make its economy carbon-neutral by 2050.

After reaching a temporary agreement earlier in the week, EU ministers confirmed elements of the Carbon Border Adjustment Mechanism early Sunday.

The historic legislation imposes a pollution tax on some European Union goods. Carbon-intensive companies inside the EU must adhere to rigorous emissions requirements, and the tax is intended to guarantee that such firms are not undercut by rivals in countries with laxer regulations.

Before being expanded to other items, the legislation will initially apply to iron and steel, cement, aluminum, fertilizers, power generation, and hydrogen.

It also disincentivizes EU corporations from shifting manufacturing to more accommodating nations, a practice referred to by EU politicians as "carbon leakage."

Companies will be required to purchase certificates under the new method to cover emissions caused by the manufacture of products imported into the European Union based on estimates tied to the EU's own carbon pricing.

On April 26, 2022, an employee works in the wheel arch of an Audi Q4 e-tron electric car (EV) at the Volkswagen AG EV facility in Zwickau, Germany. Krisztian Bocsi/Bloomberg photo via Getty Images. 'That's not how you treat your pals.' Biden's climate strategy puts a burden on commercial relations with Europe.

In a statement, Mohammad Chahim, a Dutch socialist politician who has spearheaded discussions on the proposal for the European parliament, said the measure would be a "crucial pillar" of European climate policy.

"It is one of the few levers we have to encourage our trade partners to decarbonize their industrial industries," he continued.

However, the concept has been greeted with opposition from nations such as the United States and South Africa, who are concerned about the effect of carbon border levies on their manufacturing.

"There are a lot of worries from our side about how this would damage us and our trade relationship," US trade ambassador Katherine Tai said last week at a conference in Washington, according to the Financial Times.

The European Union and the United States have previously clashed over President Joe Biden's $370 billion climate plan as part of the Inflation Reduction Act, which EU officials claim would harm European firms exporting into the US market.

The current EU agreement makes more money available for the development of sustainable energy technology in Europe, an acknowledgment to the challenge faced by the Inflation Reduction Act.

According to Faten Aggad, senior consultant on climate diplomacy at the African Climate Foundation, the EU carbon measure might lead to "rapid deindustrialization" of African nations that export to the EU.

Another concern is that clean energy capacity in poorer nations will simply be diverted to the manufacturing of exported products, while industries focused at local consumption would continue to rely on filthy fuels, according to Aggad on Twitter. She went on to say that verifying carbon emissions in producing nations is still a "problem."

Revision of climate policy
The carbon border tax is part of a larger agreement reached on Sunday that modifies the EU carbon market in order to reduce emissions by 62% by 2030 compared to 2005.

The European Union's carbon market, known as the Emissions Trading System (ETS), currently restricts greenhouse gas emissions from more than 11,000 power and industrial units, as well as all internal EU flights, which include 500 airlines.

Companies get or purchase emission permits, known as "allowances," which may then be exchanged. The ETS, which was expanded to include shipping on Sunday, is critical to the European Union's goal to become the world's first carbon-neutral continent.

As darkness sets in the Port of Hamburg in Hamburg, Germany, on Tuesday, Aug. 5, 2020, shipping boats Ever Greet, managed by Evergreen Marine Corp, left, and Umm Qarn, operated by Hapag-Lloyd AG, sit parked at the HHLA Container Terminal Burchardkai (CTB). Germany's economy fell the most in at least a half-century in the second quarter, highlighting the magnitude of Europe's struggle after the damage caused by virus restrictions that hammered firms and consumers. Getty Images photographer Alex Kraus/Bloomberg Green comeback or trading "nightmare"? Europe wants to charge ship emissions.

The number of free emissions permits will be tapered down between 2026 and 2034 under the most recent revisions. The Carbon Border Adjustment Mechanism will be implemented concurrently, safeguarding indigenous enterprises from being undercut by overseas competition.

After almost 30 hours of negotiations, negotiators also agreed to introduce a new carbon market for heating and transportation fuels in 2027, with the possibility to postpone it by one year if energy costs remain high.

"This agreement will make a significant contribution to combating climate change at a reasonable cost," said Peter Liese, senior negotiator for the European Parliament, in a statement. The agreement would "send a strong signal to European business that investing in green technology pays off," Liese said.

Before the agreement may enter into effect in 2026, it must be officially approved by the European Parliament and the European Council.