WTO approves Russian request to establish panel to examine dispute with EU over carbon border adjustment mechanism
Geneva – 25 – 9 (KUNA) -- The World Trade Organization (WTO) Dispute Settlement Body announced on Friday its approval of Russia’s request to establish a panel of experts to examine the dispute between Russia and the European Union over the Carbon Border Adjustment Mechanism (CBAM) and the EU Emissions Trading System (ETS).
In a statement issued from Geneva, the WTO clarified that the dispute concerns Russia’s challenge to the compatibility of the EU’s CBAM with the EU’s obligations under WTO rules.
The CBAM aims to ensure that foreign producers pay a carbon cost comparable to that borne by European companies under the EU’s internal emissions trading system. Importers of high-emission goods produced abroad, such as steel, aluminum, and fertilizers, are required to declare the carbon dioxide emissions associated with their products and pay a fee if these emissions exceed the standards adopted by the EU.
Russia argues that the CBAM package imposes significant trade barriers on goods imported into the EU market. It considers the allocation of emission allowances to companies under the ETS to be a mechanism designed to enhance the competitiveness of certain domestic industries, thereby restricting trade and granting European companies an advantage over foreign firms.
For its part, the EU reaffirmed that both the CBAM and the ETS are in full compliance with WTO rules. It also emphasized that its participation in the dispute settlement proceedings is “not to legitimize Russia’s actions, but to strongly affirm its support for the rules-based multilateral trading system.”
The Dispute Settlement Body approved the establishment of the panel, while Argentina, Brazil, Canada, China, India, Indonesia, Japan, the Kingdom of Saudi Arabia, the Republic of Korea, Malaysia, Norway, Paraguay, Singapore, Switzerland, Taiwan, Thailand, the United Kingdom, and the United States reserved their rights as third parties in the proceedings.
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