Wary of being subject to the European Union’s carbon border mechanism tax that is supposed to come into effect in the mid-2020s, Russia is reportedly drafting its own carbon tax to avoid cross-border taxes. The Russian government expects to have draft legislature ready in 12-18 months. EU tax could affect Russian goods worth $7.6 billion, OilPrice reports.
Russia is considering drafting its own carbon tax as the European Union prepares one to avoid cross-border taxes for Russian firms, the Vedomosti newspaper reported, citing three sources. The European Commission has outlined plans to impose a CO2 tariff on polluting goods from 2026 that will force some importers to pay carbon costs at the border on carbon-intensive products such as steel.
Moscow has said the tax could affect Russian goods worth $7.6 billion, including iron ore, aluminium, pipes, electricity and cement, and that the tax could eventually be broadened to affect oil, gas and coal exports. “Neither the government, nor business, is interested in the EU collecting payments from Russian exporters at its discretion,” Vedomosti cited a source close to the government assaying.
“The key logic is to get ahead of the EU with developing national regulation, to make it comfortable for business and to have the Russian offset measures be on a par with the European ones.” The mechanism’s development is expected to take 12-18 months, one source said. The government plans to soon set up working groups with business representatives, the newspaper said.
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