Posted 3/24/2024, 9:00:00 PM
EU Weighs Carbon Tax on LNG Imports, Risking Two-Tier Global Market
- The global LNG market could face changes in prices and trade flows if the EU includes LNG in its carbon border tax
- LNG is currently not included, so imports are not being taxed additionaly now
- The EU has extended its Emissions Trading Scheme to shipping, meaning LNG cargoes will face a carbon tax from 2024
- The EU could go further and include LNG in the carbon border tax, setting an import duty at carbon prices
- If imposed, this could bifurcate the global LNG market into a two-tier system with premium EU prices and lower Asian prices