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European Union policymakers have agreed to impose a border tax on imports of highly polluting products with a heavy carbon footprint, a deal that seeks to protect the bloc’s own climate ambitions while pressuring polluting nations to become greener, the Washington Post reported.

The agreement – which still needs final approval – would affect products such as steel, cement, and fertilizer. The tax would raise the price of those products to account for the high cost of carbon emissions in Europe, where firms pay almost $94 per metric ton of carbon released into the atmosphere.

The aim is to apply the same carbon dioxide emissions tax that European manufacturers pay when they manufacture within the EU’s borders.

Beginning in October 2023, importers would be required to account for the carbon emissions emitted throughout manufacturing processes. They will then have to start paying the tariff from 2026.

The deal came more than a week after the US invited the EU to create a trade group that would give like-minded countries an advantage in producing cleanly produced steel and aluminum. Members would levy taxes on metals produced in less environmentally friendly ways from other nations.

The agreement and trade group are particularly aimed at pressuring high polluters, such as China and India, to limit their emissions and invest in environmentally friendly industries.

But analysts said policymakers will still have to iron out some details, including questions on whether the new tariffs violate World Trade Organization rules.

Critics also feared that taxes could instigate a wider trade war, especially if the US and EU were to unite against China.

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