European industrial, energy and climate policy is hampered by contradictory requirements on the price for Greenhouse effect Gas (GHG) emissions: on the one hand, high prices would be necessary to incentivise investment and changes in consumption patterns; on the other, the preservation of the external competitiveness of EU energy-intensive industries, as well as the prevention of “carbon leakage”, would require low prices.
The proposed own-initiative report investigates the technical and legal feasibility of Border Adjustment Measures for the internal price of GHG emissions: importers pay the price, exporters get it refunded, as it already is the case for VAT. The refund of the GHG emission price to exporters could be based on a VAT-like accounting system. The GHG emission price paid by importers could be based on the basic metals and materials content of the product. This system would be in line with WTO rules, and rely upon fully proven methodologies.
This proposal addresses the priorities of the EESC Roadmap to Sibiu and beyond (2018-2019) in particular as regards the protection of the environment and mitigation of climate change. It also addresses the issue of making Europe stronger in a global geopolitical context which threatens our open market economic principles, and how to maintain and increase European innovation and ensure just transition processes. In relation to "Creating the story of a new Europe", the proposal also fits with the objective of calling for a new paradigm for tackling climate change and its dramatic effects, as well as that of inserting in all EU policy areas the strategy of green, equitable and prosperous sustainable development, building on the 2030 Agenda. It proposes a way, in the form of Border-Adjustment Measures, to reconcile the interests of energy-intensive industries – and of the workers in those industries – with those of climate preservation and would therefore contribute to the discussions on achieving a just transition to environmental sustainability, with some concrete recommendation for the new European institutions following the 2019 elections.
Climate change and ensuring a sustainable energy supply are issues which impact on all major civil society stakeholders. A public hearing would be organised in the preparation of the own-initiative proposal, bringing together industry representatives, trade unions and interested consumer and environmental NGOs, for example the European Environmental Bureau and the European Climate Foundation, in order to obtain their input regarding the proposal.