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Canada pushes EU to exempt its exporters from carbon border tax
Canada says it is close to a deal that would shield its exporters from the European Union’s new carbon tariff, though the details are still being worked out.
At the close of last week’s Canada-EU summit in Montreal, Prime Minister Mark Carney said the two sides had found “common solutions” on the EU’s carbon border adjustment mechanism (CBAM). The levy charges importers for the carbon emitted in making goods such as steel, aluminium, iron ore and cement. European Commission President Ursula von der Leyen called the issue one of the “trade irritants” between the partners.
Ottawa’s main complaint is that the EU does not count the industrial carbon price Canadian producers already pay. A Global Affairs Canada memo estimates that about $2.8 billion a year of Canadian goods, mostly metals already hit by US tariffs, are exposed to the levy.
Jonathan Wilkinson, Canada’s ambassador-designate to the EU, said the bloc will “recognize our carbon price,” but there is still “a bit of work” left, with a deadline of around late 2027. How much credit Canadian producers will get is unclear.
The Conservatives criticised Carney for failing to remove the threat. Analysts warn that Ottawa’s recent weakening of its industrial carbon pricing could make it harder to secure that credit.
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