The World Trade Organization’s dispute settlement body has agreed to Russia’s request for a panel to examine the European Union’s carbon border levy, opening a new stage in a trade dispute over the bloc’s climate policy.
Russia argues that the EU’s Carbon Border Adjustment Mechanism (CBAM) creates discriminatory trade barriers by imposing carbon charges on certain imports to match costs faced by European producers. Moscow has also challenged the treatment of free emissions allowances granted to some European industries, arguing that the arrangement amounts to an export subsidy.
The WTO approved the panel request on Friday after Russia’s initial request in July failed to secure agreement. The panel will now examine whether the EU measure complies with international trade rules.
CBAM is designed to protect European industries from competition from imports produced in countries with weaker climate regulations. However, countries including Brazil, South Africa and India have criticised the mechanism, arguing that it could place additional costs on developing economies.
The EU has maintained that its carbon border measures are compatible with WTO rules and said it will participate in the proceedings.
The dispute could have wider implications for global trade as governments increasingly introduce carbon-related measures to support domestic industries while pursuing emissions-reduction targets.
Leave a comment