Environmental Levy to Be Applied to Steel and Aluminum
Tax Scope Expanded to 180 Product Categories
The so-called "carbon border tax," which the European Union (EU) will fully implement starting January next year, will be expanded to include products such as washing machines and automobile parts.
On December 17 (local time), the EU unveiled a revised proposal for the Carbon Border Adjustment Mechanism (CBAM), which would expand the environmental levy to dozens of products manufactured using processed steel and aluminum.
CBAM, the world's first carbon border tax, is a system that imposes taxes based on estimated carbon emissions generated during the production of seven categories of goods imported into the EU, including steel, aluminum, and fertilizers.
This measure targets companies from third countries that produce carbon-intensive products, aiming to ensure that European industries subject to strict emissions regulations can compete on a level playing field. Carbon-intensive products refer to goods manufactured through processes that emit large amounts of greenhouse gases.
In this revision, the EU proposed expanding the scope of taxation to 180 downstream products with a high proportion of steel and aluminum use, such as construction materials and machinery.
While most of the affected products are industrial items such as wiring and cylinders, household appliances like washing machines are also included.
According to Reuters, the "CBAM Business Alliance," which consists of European companies and industry groups, welcomed the revision, stating that it targets products with a high risk of relocating production facilities overseas to avoid climate regulations.
The EU expects this system to generate annual revenues of 1.4 billion euros (approximately 2.43 trillion won) for the EU.
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