Fri, 06 Aug 2021

CANBERRA, June 11 (Xinhua) -- An Australian think tank has warned that a push by the European Union (EU) to introduce carbon tariffs, an issue to be discussed at the Group of Seven (G7) summit, will put Australian industry and manufacturing processes, mainly steel, aluminium and alumina, at risk.

In a report published on Friday ahead of the summit, the Australia Institute said that the adoption of a cross-border carbon adjustment could seriously affect Australia's exports of alumina and aluminium.

The EU cross border adjustment mechanism (CBAM) would impose a levy on all goods imported to the EU and Britain from "less climate-ambitious countries".

If introduced, tariffs would be placed on Australian exports of energy-intensive materials such as aluminium and steel.

"Some sectors of the economy are going to be highly vulnerable if Australia doesn't act," Hugh Saddler, a contributor to the report from the Australian National University's Crawford School of Public Policy, said in a media release.

"Almost all Australian aluminium and alumina goes to export. Australia needs to ensure the competitiveness and future of these industries, and our broader manufacturing sector, by investing in clean production methods," said Saddler.

According to the report, Australia is the world's second biggest producer of alumina, accounting for 13.9 percent of global output.

The Australian government has pushed back against the CBAM, describing it as a "protectionist" policy.

"Our view is that carbon tariffs are not the way to go," Trade Minister Dan Tehan told a South Australian radio earlier this week. "They're protectionist at heart and all they'll do is harm trade, which obviously benefits all countries."

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