EU carbon tax could lock UK farmers out of European market
UK farmers could be locked out of the European market if the EU introduces a carbon tax to prevent high emission imports, a trade expert has warned.
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Dmitry Grozoubinski, a former Australian trade negotiator and founder of the Explain Trade website, said a carbon adjustment tax at the EU border is ‘almost inevitably coming’ because the bloc wants to stop producers being undercut by lower standard imports and prevent pollution being ‘outsourced’ to other countries.
But he pointed out the mechanism which the EU uses could leave UK farmers at a disadvantage, despite their positive track record on sustainability.
“Say something arrives in the EU, then the EU calculates how much carbon tax it would have paid had it been made in the EU,” Mr Grozoubinski told attendees of the NFU Cymru conference in Llandrindod Wells last week (November 7).
“It will then will probably allow some system for you to say, ‘that is the average, but look at all these things I have done to produce it more cleanly, you should charge me less’.
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“Because it is the EU, the mountain of paperwork you would have to do… could lock you out of their market.
“If the administration costs of receiving a fair rebate for green production outweigh the rebate, you are ultimately paying more tax than a far dirtier producer who says they will take the average.”
Mr Grozoubinski went on to urge farmers to work with the UK Government to ensure agricultural products would have fair access to the EU market once a carbon adjustment tax is imposed.
“It is going to happen,” he said.
“And you need to monitor what you as a farmer will need to do to get a fair return on that tax.”
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