Climate change is central to the agenda of the new European Commission. Yet many member-states fear that action on climate change will undermine their economic competitiveness and lead to carbon-intensive economic activity moving from the EU to more accommodating jurisdictions. 

One solution the Commission is considering is to tax imported CO2 – with proposed trade commissioner Phil Hogan tasked with designing and introducing a so-called carbon border tax. Such a tax would be levied on imported goods at a rate commensurate with the amount of CO2 emitted in their production.