Without emissions trading system, EU partners will be subject to carbon border adjustment

By Gulsen Cagatay and Nuran Erkul Kaya

GLASGOW, Scotland (AA) - European Union trading partners that have not put an emission trading system in place, within the scope of their targets to combat climate change, will be subject to a Carbon Border Adjustment Mechanism (CBAM), according to Kadri Simson, the EU Commissioner for Energy.

Speaking to Anadolu Agency in an exclusive interview on the sidelines of the COP26 summit, Simson said the CBAM aims to ensure that European emission reductions contribute to a global emissions decline, rather than pushing carbon-intensive production outside of Europe.

On July 14, the European Commission (EC) adopted a proposal for a new Carbon Border Adjustment Mechanism under the EU's Green Deal package to put a carbon price on imports of a targeted selection of products so that ambitious climate action in Europe does not lead to 'carbon leakage'.

If the proposal is approved, the EU would demand that its trading partners set up their own emissions trading systems to reduce carbon emissions. However, if governments fail to do so, the EU would implement the carbon tax mechanism at the border.

The aim is to also encourage industry outside the EU and international partners to take similar steps to combat climate change, Simson said.

Although the EU currently causes less than 10% of annual emissions, she stressed the importance of EU trading partners complying with carbon emission targets in energy production and consumption.

This could affect Turkey, one of the major trade partners of the EU, accounting for half of the country's exports.

A study by the European Bank for Reconstruction and Development (EBRD) shows that Turkish exporters of energy-intensive products such as cement, steel and aluminum could face steep additional costs when legislative proposals tabled by the EC under the European Green New Deal come into effect.

Businesses in Turkey could pay extra charges of as much as €777 million ($898 million) under the new rules, but if only direct emissions are considered, costs could decrease to €399 million ($461 million).

- Reducing methane emissions could reduce global temperature rise by 0.2 degrees Celsius

Commenting on the global commitment to cut methane emissions by 30% by 2030 under the Global Methane Pledge, Simson said that with pledges from 105 countries, the global temperature rise could be reduced by 0.2 degrees Celsius (32.36 degree Fahrenheit) by reducing methane emissions.

"It is very important for countries to accept this problem first and then make a political commitment. We expect them to implement clear plans. Reducing methane emissions will contribute to achieving our Paris Agreement goals," she said.

Led by the US and the EU, 105 countries signed up to the pledge but India, China, Russia, Iran and Australia, which are among the biggest methane emitters, failed to do so.

The signatory countries account for 46% of the global emissions and represent almost 70% of the global economy.

Simson underlined the importance of scaling up climate finances from developed countries to developing and emerging economies in the fight against global climate change.

She argued that the EU has always kept its promises and it would increase financial support if other developed countries also deliver on their promises.

"Because without keeping our promises, we can't expect that developing countries will follow our lead," she said.