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A senior German government official has dismissed claims from Australian government ministers that carbon border charges could become a new form of protectionism.
Dr Jürgen Zattler, a director general at the German federal ministry for economic cooperation and development, told Guardian Australia such a policy would be a tool to fight global warming, not a tool to protect domestic industry.
The European Union is considering the design of a carbon border adjustment mechanism to place a carbon price on imports from less climate-ambitious countries. It is intended to prevent “carbon leakage” – or local production shutting down and moving to countries without strong climate policies.
While there are differing estimates about the costs facing Australian businesses, the trade minister, Dan Tehan, has said his “big concern about the EU plan is it’s all about protectionism”.
Tehan told reporters this month that the EU already had “heavily subsidised industries” and he did not want to see “additional protectionist measures put in place”, weeks after the emissions reduction minister, Angus Taylor, said Australia was “dead against” such tariffs.
But Zattler pushed back at such concerns, when asked to respond to Australian politicians who believed this could become a new form of protectionism.
“I am rather confident that a carbon border adjustment mechanism can be designed in a WTO-compatible manner and I have no doubt that the EU Commission will take this into account in its legislative proposal,” the minstry official said.
Zattler is responsible for Germany’s international development policy, the 2030 sustainable development agenda and climate – but he is well acquainted with trade issues, as a former deputy head of the division for the World Trade Organization and trade policy.
“The most important issue for WTO compatibility is to ensure non-discriminatory treatment of the imported goods subject to such a mechanism,” he said.
That could be accomplished by, for example, making companies that had produced goods in countries where the carbon price was lower than in the EU buy emission trading certificates at the border, Zattler said.
He said the mechanism was being considered because of the EU’s ambition to achieve climate neutrality by 2050 and because of the relatively high carbon price required to achieve this goal.
The EU was seeking to prevent “carbon leakage”, or the “relocation of domestic industries to countries with less stringent carbon or climate policies”, he said.
“It is thus a tool to fight global warming and climate change, not a tool to protect domestic industry.”
But Zattler acknowledged that the measure would “have an impact on companies from outside of the EU” and signalled that the ministry would “look in particular into the anticipated effects of the legislative proposal on developing countries and seek to minimise these to prevent our partner countries from being disproportionally affected”.
The official answered questions from Guardian Australia after he addressed the Berlin Energy Transition Dialogue, where Taylor defended the Australian government’s climate policies.
Taylor told a virtual session of the two-day event: “We welcome ambition but practical action and achievement at the local level on the ground are what actually matters.”
He said the government wanted to reduce the cost of technologies such as hydrogen to “make net zero practically achievable – not just for high-income countries but for …. developing nations as well”.
Zattler said Germany saw “tremendous potential to partner on low-emissions technologies with Australia, particularly in the expansion of green hydrogen”.
He said Germany also saw “great opportunities for all countries that have also set themselves the goal of reaching climate neutrality by 2050 for industry, innovation and employment in resolute and joint action with the right premises”.
To date, Australia has resisted formally committing to net zero emissions by 2050. The prime minister, Scott Morrison, has said he wants Australia to get to net zero emissions “as soon as possible” and “preferably by 2050” but he has faced pushback from some members of his Coalition partner, the National party, who have raised fears over the potential costs and demanded some sectors be “carved out”.
But Zattler said Germany firmly believed “that transitioning to zero-carbon societies is necessary for our future on a healthy planet and it is economically viable”.
“For highly developed industrialised countries like Germany and Australia, the goal of reaching net zero greenhouse gas emissions is ambitious but necessary in order to keep global warming until the end of the century below the 1.5 degree benchmark,” he said.
The EU ambassador in Canberra, Dr Michael Pulch, told Guardian Australia last month that Europe wished to see all of its partner countries head in the direction of net zero emissions by 2050. All countries should also consider upgrading their 2030 targets as part of “a more ambitious climate objective”.
The EU and Australia are negotiating a free trade agreement. The EU draft text includes a sustainable development chapter that emphasises the importance of effectively implementing the Paris agreement on cutting emissions.
Speaking to parliament on Tuesday, Tehan said Australia and the EU had concluded the 10th round of negotiations on the trade deal. He said Australia’s chief negotiator had informed him that “more progress was made on the 10th round than has been in the previous nine”.
On Monday Guardian Australia reported that the Minerals Council of Australia had weighed into a European Commission climate policy debate, urging it to back fossil fuels with carbon capture use and storage and nuclear power on a list of environmentally friendly developments.
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