14 Jul 2021 19:35

Carbon border adjustment to affect Russian exports to EU in amount of $7.6 bln - Econ Ministry

MOSCOW. July 14 (Interfax) - The program presented by the European Commission for the fight against climate change, which envisages a Carbon Border Adjustment Mechanism (CBAM), will affect Russian supplies of steel, aluminum, pipes, electricity, and cement in a total amount of $7.6 billion, the Russian Economic Ministry said in a statement.

"When the mechanism starts fully operating, metals, pipes, fertilizer, cement, and electricity will only be able to be imported to the European Union provided each tonne of CO2 emissions formed in their production has been paid for. It is assumed that the price of a tonne of CO2 will be equal to the average price determined at auctions in the EU Emissions Trading System. The measure will affect Russian supplies of iron and steel, aluminum, pipes, electricity, and cement to the EU in the volume of $7.6 billion," the statement said.

"For the almost year and a half in which the project was in development, EU colleagues were assuring the whole world that the letter and spirit of the WTO agreement would be fully observed. Today, there is no certainty of this," Economic Development Minister Maxim Reshetnikov was quoted as saying in the statement.

"We hope EU representatives will keep the promises they made to us earlier and ensure the document's compliance with the standards of the WTO, the United Nations Framework Convention on Climate Change, and other international agreements. We expect a meaningful dialog with colleagues from the European Commission," Reshetnikov said.

According to the ministry, the relation between the EU's proposed mechanism and the fight against climate change is unclear given that the Paris Agreement guarantees countries the right to independently determine the most effective methods to combat climate change for themselves.

"A global problem can only be solved through coordinated actions of all countries. The more so that the UN Framework Convention on Climate Change speaks directly about the fact that measures to combat climate change should not be used to restrict international trade," Reshetnikov said.

The ministry recalled that the proposal for the CBAM project, which the European Commission had been developing for over a year and which declares preventing risks of carbon leakage as its goal, was published on the EC's official website on July 14.

"In other words, this is a fight against the transfer of industrial production from the territory of the EU to other countries," the Economic Development Ministry said.