EU to make it harder to suspend carbon fee on imports

By Kate Abnett

BRUSSELS, June 12 (Reuters) - European Union countries agreed on Friday to restrict the circumstances in which the bloc can suspend its carbon emissions fee on imports, potentially helping to provide more certainty for low-carbon investments in the bloc.

EU economy ministers backed the plans with majority support, despite countries including Slovakia, Romania and Lithuania declining to support them.

The EU carbon border levy imposes a ​fee on the emissions associated with imports of goods, including fertilisers, steel and cement. The world-first policy aims to protect European industries from being undercut by cheaper, more polluting goods from abroad.

The European Commission originally proposed that it could remove goods from the carbon levy in future if unspecified "serious and unforeseen circumstances" resulted in higher prices. 

Some governments and companies rejected that approach, saying it created uncertainty for low-carbon investments that are only competitive if polluting imports are subject to the EU emissions fee.

A draft of the ministers' agreement, seen by Reuters, said the Commission could propose suspending the carbon fee only if criteria are met, including that the price of the product concerned had increased by more than 50% over six months, versus the average over the last 10 years.

EU countries and lawmakers will negotiate the final rules. EU lawmakers also plan to scale back or delete the suspension clause entirely.

France led calls after the Iran war drove up costs for the EU carbon fee to be suspended for fertilisers to help farmers.

It supported the deal on Friday, after it received concessions that would benefit French overseas departments Guadeloupe and Martinique by allowing these territories' cement imports to avoid the charge during natural disasters or other emergencies.

The proposals, once finalised, will also extend the list of goods covered by the carbon fee to include products such as washing machines and car parts.

(Reporting by Kate Abnett; editing by Barbara Lewis)