Australia, one of the world’s largest exporters of fossil fuels, has strongly criticized the European Union’s proposal to introduce a carbon limit tax.
The measure was ratified yesterday in the EU’s comprehensive new climate plan.
Such a tax would make EU exporters pay more for goods such as steel and cement, to create a level playing field for European firms paying carbon permits.
But Australia has argued that such a tariff would be “protectionist” and could violate trade rules.
Trade Minister Dan Tehan said Australia was “looking very closely” at any possible rule violations to see how it would be imposed.
“The last thing the world needs now is additional protectionist policies being implemented,” Tehan said on Thursday.
Just 4% of Australia’s exports go directly to Europe, but such a tax, if passed, would likely create inflow costs for the sale of Australia’s resources to China and other major Asian markets.
Mining commodities such as iron ore, coal, gas and oil account for more than two-thirds of Australia’s export wealth.
Mr Tehan suggested the EU was “unilaterally imposing its views and its methods on other countries” and that doing so would “undermine” global cooperation on reducing emissions.
Referring to the COP26 summit in Glasgow in November, he said, “[यह] We’re not necessarily going to get the results we’re all looking for and so we’d like to discuss this further with them.”
But environmental critics say Australia has been an outsider in rejecting such climate action. The UK and US are also considering carbon limit measures to ensure that countries with weaker climate targets such as Australia do not undermine their emissions reduction efforts.