Australia, one of the world’s largest fossil fuel exporters, has strongly criticized the European Union’s proposal to introduce a border carbon tax.
The measure was endorse yesterday in the EU’s comprehensive new climate plan.
The tax would make exporters to the EU pay more for products such as steel and cement, leveling the playing field for European companies that pay for carbon emission allowances.
However, Australia argued that such a tariff would be “protectionist” and could violate trade rules.
Trade Minister Dan Tehan said Australia would “look very closely” at the way the tariffs were imposed to avoid a possible breach of the rules.
“The last thing the world needs right now is the imposition of additional protectionist measures,” Tehan told the Australian Broadcasting Corporation (ABC) on Thursday.
Only four percent of Australia’s exports go directly to Europe, but such a tax, if passed, would likely impose costs on Australian commodity sales to China and other key Asian markets.
Mined commodities such as iron ore, coal, gas, and oil account for more than two-thirds of Australia’s export wealth.
Mr. Tehan argued that the EU was “unilaterally imposing its views and ways on other countries” and that such a tax would “undermine global cooperation on emissions reduction”.
“[This] is not necessarily going to deliver the results we want, so we will try to discuss this further with them,” he said, referring to the COP26 summit in Glasgow in November.
However, environmental critics say Australia has been an outlier in rejecting such climate measures. Britain and the US are also considering carbon cap measures to ensure that countries with weaker climate targets, such as Australia, do not undermine their emissions reduction efforts.
Australia’s conservative government has rejected carbon pricing as a climate change strategy since 2014 when it scrapped an emissions trading scheme set up by the previous Labor government.
Researchers rank Australia as the third-largest exporter of polluting fossil fuels, after Russia and Saudi Arabia.
Despite pressure from its allies, Australia remains one of the few G20 countries that has not yet committed to a net-zero emissions target by 2050.
Prime Minister Scott Morrison said the country “hopes” to achieve this through investment in technologies such as carbon capture and storage, not a carbon tax.