New climate targets make the improvement of emissions trading schemes and trade policies inevitable

The European Parliament debated a resolution on preventing carbon leakage. Fidesz MEPs Edina Tóth and Enikő Győri agree that one of the important tools for achieving the common emissions targets and maintaining the competitiveness of European industry could be the planned new mechanism, which will have to complement and thus strengthen the existing environmental and trade policy measures.

In her plenary speech, Edina Tóth emphasized the need to “protect EU industry from the additional risk of carbon leakage, i.e. from relocating production and investment to regions where climate policy is significantly less stringent”. She believes that the introduction of a new mechanism for adjusting CO2 emissions, in line with the EU Emissions Trading Scheme and only in the form of a parallel structure can be supported.

According to MEP Enikő Győri, whatever legislation will be adopted in the future, it must be in line with the rules of the World Trade Organization (WTO). “An anti-WTO solution could result in our trading partners, who have to pay duties or taxes on their products to the EU under the new EU legislation, retaliate against the EU’s new policies with defensive retaliation. As a result, our companies may face protective tariffs in foreign markets, which will reduce their competitiveness”, she explained.