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Updated July 15th, 2021 at 23:09 IST

EU climate plan imposed unilaterally, says Australia on imposition of new tax

EU noted that the European producers cut emissions but struggle to compete with importers that don’t have the same environmental restrictions, like Australia.

Reported by: Ajeet Kumar
Australia
Credit: AP/@DanTehanWannon | Image:self
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The European Union (EU) unveiled a new legislation to help meet its pledge to cut emissions of gases. This included a controversial plan to tax foreign companies for the pollution they cause. On July 15, Australia criticised the recent move and said such a tariff would act as 'protectionist' and could breach trade rules. Australia - one of world's biggest fossil fuel exporters - accounts for nearly 4 per cent of the country's exports.

The new legislation would impose duties on foreign companies and therefore increase the price of certain goods, notably steel, aluminium, concrete and fertilizer. According to the EU, the main motive behind implementing the new legislation is to ease pressure on European producers. It is known that the European producers cut emissions but struggle to compete with importers that don’t have the same environmental restrictions.

EU Climate plan imposed unilaterally: Australia

Meanwhile, Australian Trade Minister Dan Tehan while expressing his views to Australian Broadcasting Corporation (ABC), said that the Union is imposing their unilateral view on them. This introduction of new tax would further undermine global cooperation on reducing emissions. Referring to November's COP26 summit in Glasgow, Australian Trade Minister added that the recent move would also impact severely on Europe and Asian countries like China. It is worth noting that Australia being one of the largest exporters of fossil fuel mines commodities such as iron ore, coal, gas and oil that account for more than two-thirds of the country's export wealth. It ranks the third most polluting fossil fuel exporter behind Russia and Saudi Arabia.

EU sets major climate plan to reduce carbon emission

The legislation presented by the EU’s executive branch, the European Commission, encompasses about a dozen major proposals, ranging from the de-facto phasing out of gasoline and diesel cars by 2035 to new levies on gases heating buildings. They involve a revamp of the bloc’s emissions trading program, under which companies pay for the carbon dioxide they emit, and introduce taxes on shipping and aviation fuels for the first time. Most proposals build on existing laws that were designed to meet the EU’s old goal of a 40% cut in greenhouse gas emissions by 2030 compared to 1990 levels — and must be endorsed by the 27 member countries and EU lawmakers.

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Published July 15th, 2021 at 23:09 IST

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