EU rejects talks with Russia on carbon tax, backs Ukraine
Photo: Russia requested consultations with the EU in May (Getty Images)
The European Union has rejected Russia’s request for consultations on the Carbon Border Adjustment Mechanism (carbon levy), citing Russia’s "aggressive war" against Ukraine as the reason, according to Reuters.
Russia submitted the request to the World Trade Organization (WTO) earlier in May, seeking discussions with the EU over its carbon border levy. This move marked the first step in a potential trade dispute ahead of formal proceedings.
"The European Union is of the view that the consultations requested by the Russian Federation cannot be fruitful and cannot lead to a mutually satisfactory solution of (the) matter at hand," an EU document submitted to the WTO on May 26 read.
What it's about
When Russia exports goods such as steel, fertilizers, or cement to the EU, their production typically involves energy sources with high carbon emissions.
The EU’s CBAM requires importers to pay a carbon tax upon entry to prevent goods from "polluting" countries from gaining an unfair advantage over European producers who already pay for their emissions.
In essence, CBAM serves as a "price of entry" into the EU market for high-emission products.
EU may grant Ukraine leniency on CBAM
Carbon Pulse recently reported that the European Commission is ready to delay the full implementation of CBAM for Ukraine until February 1, 2027. However, Kyiv has not yet submitted an official request.
