Australia considers introducing a carbon border tax, similar to the EU

Following the European Union’s example, the Australian federal government is now considering introducing a carbon border tax. It would initially be imposed on steel and cement imported from countries with less ambitious climate targets.

The EU’s so-called Carbon Border Adjustment Mechanism (also imprecisely referred to as a carbon border tax or CBAM) will enter its transitional phase in October this year. Australia is now following the EU’s example, as reported by The Guardian.

The federal government in Canberra has said for the first time that it is now discussing a similar measure. Climate Change and Energy Minister Chris Bowen said the department would launch two rounds of consultations on whether Australia should adopt its own CBAM. The measure aims to prevent domestic companies subject to environmental limits from being put at a disadvantage. The first two products to be considered will be steel and cement.

The EU will fully implement its CBAM from 2026. Bowen said that by the third quarter of 2024, the department and researchers would publish an assessment report on whether Australia should introduce a similar policy or take other steps.