EU won’t ratify trade deal with Australia without emission cuts

Canberra — A lawmaker in Brussels is warning that a free-trade deal being negotiated with Australia won’t be ratified by the EU until it does more to reduce its emissions, the Australian Broadcasting Corporation (ABC) reported on Thursday.

It cited Kathleen van Brempt saying an agreement is contingent on “a clear vision” from Australia on “when and how it will become climate neutral and by when and how it will phase out of coal”.

In another sign of its resolve to push countries around the world to step up their climate efforts, the European parliament adopted a non-binding resolution calling on the EU to propose a carbon levy on products from countries lacking serious pollution reduction programmes, the ABC said. The European Commission plans to unveil the details of the carbon border adjustment mechanism in June, which is initially set to apply to a narrow range of imported goods, most likely power, cement and steel.

The EU has a policy of making adherence to the Paris climate accord a pre-condition for free-trade agreements. The EU-Japan deal, which entered into force in 2019, was the first of the bloc’s trade pacts that included a specific reference to the Paris agreement.

The commission, the EU’s executive arm, negotiates trade deals on behalf of the 27-nation bloc and which the European parliament has to ratify.

“It’s deeply concerning,” Australian trade minister Dan Tehan said in a Sky News interview on Thursday, adding the nation is on track to meet its Paris targets. “We don’t know how they’re going to make it World Trade Organization-compliant. There are serious exemptions given in the EU to heavy industries there. Their industrial sector gets free passes on this.”

Europe’s moves are a further sign of how Australia’s support for its coal industry is leaving it increasingly isolated abroad. The world’s third-biggest emitter per person relies on the fossil fuel for 13% of its export revenue, totaling A$64bn in 2019, even as its largest markets, including Japan and China, have recently set hard targets to reach net-zero.

The US election win for President Joe Biden, a supporter of greater action to reduce greenhouse gas emissions responsible for global warming, has added to the sense that Australia is an outlier. In December, Morrison — who is also promoting oil and natural gas exports as a way to drive future economic growth — wasn’t invited to speak at the UN Climate Action Summit because he hadn’t come up with an ambitious enough pledge.

Australia launched trade negotiations with the EU in June 2018. As a bloc, the EU is the nation’s third-largest trading partner. Tehan, appointed to the portfolio in December, has said he wants to complete the deal this year.

Bloomberg