However, coal tariffs would significantly reduce imports of iron, steel and fertilizers from Russia and China to Finland.
European Coal tariffs prepared by the Commission would cut imports into Finland by a quarter for duty-free products imported from countries backing coal duties.
This is evident from a recent study by Etla and the Finnish Environment Institute for the Ministry of Employment and the Economy.
“The most significant effects of the tariffs would be on imports of iron and steel and fertilizers, especially from Russia and China,” the research report said.
The biggest impact comes from the decline in iron and steel imports. The second biggest factor is the decline in fertilizer imports.
In euro terms, the drop in imports from Russia and China would be around EUR 300 million.
Researchers However, the impact of carbon tariffs on the Finnish economy would be small.
Carbon tariffs would benefit industrial sectors that produce products subject to tariffs, as well as those that produce significant quantities of intermediate products for the benefit sectors.
The rest of the industry would suffer from coal tariffs as a result of increased production costs.
In the EU, the effects of carbon tariffs are greater than in Finland.
“Of course, the effects vary from country to country, both inside and outside the EU. The imposition of tariffs reduces competition for duty-free products within the EU, but tightens competition outside the EU, ”says Etla’s Research Director. Tero Six says in a press release.
Researchers propose fiscal and subsidy policies to offset the effects of tightening climate policies in the coming years.
Researchers warn that the product restriction proposed by the EU is not entirely unproblematic.
“If the carbon limit mechanism is not extended to end products that use the products covered by the mechanism, environmental regulation can create a competitive advantage for polluting imports into the EU,” says Kuusi.
EU presented by the Commission in July last year a comprehensive package of climate measures to help the Union achieve 55% emission reductions compared to 1990 levels.
Read more: Forests, carbon tariffs, cars: Such climate measures are proposed by the EU Commission and may affect Finland
Thus, the plan for coal tariffs was not originally related to Ukraine’s war and sanctions on Russia.
In July, the Commission proposed carbon tariffs, or rather carbon levies, on carbon-intensive products from outside the EU. These would initially be cement, iron and steel, aluminum, fertilizers and electricity.
Under the scheme, an EU importer has to pay a carbon tax if it imports these products into the EU from third countries, and it is known that there is no emissions trading in the producer country, for example.
The carbon tax equalizes the price difference between the imported product and a similar product produced in the EU.
Carbon boundary mechanism in the second phase, payments will be extended to new sectors.
The introduction of carbon taxes will start in stages. The transition period will run from 2023 to 2025 and is expected to apply from 2026 onwards. During the transition period, the EU will hold bilateral talks with importing countries, among other things.
According to the Commission, carbon levies are designed to be introduced elsewhere in the world. The EU receives money from carbon taxes, the so-called own resources, but the main aim of the system is to reduce emissions.
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