Australia Needs More Climate Action for EU Deal, ABC Says

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A lawmaker in Brussels is warning that a free-trade deal being negotiated with Australia won’t be ratified by the European Union until it does more to reduce its emissions, the Australian Broadcasting Corp. reported Thursday.

It cited Kathleen van Brempt saying an agreement was contingent on “a clear vision” from Australia on “when and how they will become climate neutral and by when and how they 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 programs, the ABC said. The European Commission plans to unveil in June the details of the so-called carbon border adjustment mechanism, 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 precondition 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 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 WTO compliant. There are serious exemptions given in the European Union 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$64 billion in 2019, even as its largest markets including Japan and China have recently set hard targets to reach net zero.

The U.S. 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 United Nations 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 union 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.

©2021 Bloomberg L.P.

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