By setting “a price on negative externalities“, the carbon adjustment mechanism at the borders of the European Union will enable European companies to compete “fairly” with their international competitors, the French Minister for Industry, Agnès Pannier-Runacher, said on Wednesday 9 September while in Brussels, where she met with European Commissioners Vestager, Timmermans and Breton on Thursday.
As the EU moves towards climate neutrality by 2050, the aim of the future mechanism will be to ensure that European companies are not penalised against companies from non-Member States exporting products and goods to the EU that do not meet the same environmental standards or that they relocate their production abroad (carbon leakage). It should be the subject of a formal proposal in 2021 (see EUROPE 12534/10, 12439/14).
For Ms Pannier-Runacher, the approach should be gradual. “We need to start with goods that are robust enough to make the methodology unassailable, especially at the WTO”, she said, citing the “steel, aluminium and cement” sectors as the first candidates to be covered by the mechanism. “Once you've shown that it works, it's easier to move on”, and to demonstrate that it's not “hidden protectionism”, she added.
The minister indicated that between 1995 and 2015, French industry had reduced its CO2 emissions by 40%. But, as it has imported more and from further away and relocated, its carbon footprint has increased by 20%. “It's a double penalty: you don't respond to climate issues nor to social issues”, she said.
European Recovery Plan. Ms Pannier-Runacher also called for a rapid implementation of the European Recovery Plan through the national recovery plans.
Recently presented, the French recovery plan - endowed with €100 billion, including €40 billion in subsidies that will come from the Recovery and Resilience Facility - is “in line with the European Recovery Plan”, the minister stressed. The focus is on green and digital transitions, territorial cohesion and investment in skills and health.
According to Ms Pannier-Runacher, the European Recovery Plan and the Multiannual Financial Framework 2021-2027 will help mobilise the EU27 to win “the decarbonation battle”. According to her, new joint projects aimed at strengthening the EU's “strategic autonomy” could be set up in the health, telecommunications (5G, data control), microprocessors, pharmaceutical and agri-food sectors.
The EU Council on ‘Competition’ will discuss, on Friday 18 September, the resilience of EU industry to competition from non-Member States (see EUROPE 12553/10). In conclusions to be adopted on 24 and 25 September, the EU summit will stress the importance of the market for the post-Covid-19 economic recovery. (Original version in French by Mathieu Bion)