EU downplays prospect of carbon tariffs, pushes for end to levies on green goods

EU trade commissioner nominee warns carbon tariffs would provoke trade war

The EU's new trade commissioner-designate, Karel De Gucht, has signalled that he opposes proposals to introduce tariffs on imports from economies without carbon emission controls, but would like to see an end to all tariffs on low-carbon goods and services.

Addressing members of the European Parliament yesterday, De Gucht warned that any attempt to protect those energy-intensive imports affected by European carbon caps from international competition would prove counterproductive.

Some politicians and business groups have called on the EU to respond to the failure to deliver an international agreement in Copenhagen late last year by imposing carbon tariffs on imports from companies in countries such as China and India, which unlike the EU are not subject to legally binding emission caps.

But De Gucht, an experienced Belgian politician and current EU commissioner for development and humanitarian aid, warned that such an approach would "run into many practical problems" and risk a trade war where countries outbid each other in imposing carbon tariffs.

He did, however, call for an end to border tariffs currently levelled on low-carbon goods and services, such as wind turbines and solar panels.

The US has been pushing for measures to liberalise trade in green products and while it remains unlikely that progress can be delivered through the long-running Doha Trade Talks, diplomats are optimistic that a separate international agreement could be brokered.

De Gucht said he did not think a binding agreement to end tariffs on low-carbon products could be reached at the World Trade Organisation, but he said he would try to convene a "coalition of countries" that would agree to remove levies on green goods.

Meanwhile, a row over EU green tax policy could be brewing after the nominee for tax commissioner, Algirdas Semeta, told MEPs that the development of a new energy taxation regime designed to help curb carbon emissions would be a top priority were he to take up the post.

"The energy taxation directive will be one of my first priorities in my future job," he said. "I think in the future, if we would move forward with green taxation it would allow us to decrease taxation on labour."

Semeta's proposals could see French and Swedish plans for carbon taxes rolled out across the rest of the EU. However, a number of countries including the UK fiercely oppose EU involvement in tax policy and any proposals are likely to face a major challenge if they are to be adopted across the EU.