WTO Carbon Levy Dispute
World Trade Organization establishes a panel to review Russia's challenge against the European Union carbon levy.
Anonymous
The World Trade Organization agreed to establish a panel to review Russia’s challenge to the European Union’s Carbon Border Adjustment Mechanism, after the EU blocked Russia’s initial request in July. Russia says the levy on emissions-intensive imports restricts trade and that free emissions allowances for some EU companies act as an export subsidy; the EU maintains that the measures comply with WTO rules and says it will participate in the proceedings. The case has drawn broad interest from WTO members, including major economies and developing countries that have raised concerns about the policy’s effects on trade and exporters.
Key Points
1
The CBAM requires importers of carbon-intensive goods such as steel, aluminum and fertilizer to declare the emissions embedded in their products and pay a levy when those emissions exceed EU standards.
2
Before requesting a WTO panel, Russia sought consultations with the EU on the CBAM and emissions trading system; Brussels rejected the request, saying discussions could not be fruitful given Russia’s invasion of Ukraine.
3
Russia’s Ministry of Economic Development said the CBAM was addressing not climate change but “the problem of European production shifting to third countries.”
4
The dispute has attracted third-party participation requests from a wide range of WTO members, including Argentina, Canada, China, Japan, the United Kingdom and the United States.
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