The household appliances industry raises the alarm about the CO2 tax that the EU is preparing to introduce. According to European and ISTAT data, the reshoring trend that has been affecting three out of four companies for some years now runs the risk of stalling and, indeed, turning into an inverse movement, with the resumption of new relocations. The danger comes from the choices of the European Union on the subject of decarbonization, which aim to tax raw materials and goods with a high content of polluting emissions from countries that do not protect the environment. But, what is very serious, they forget to also tax the finished products which contain these materials and which already arrive in heavy ecological dumping.
A gloomy picture, not even that far since it's about the incumbent CBAM (Carbon Border Adjustment Mechanism), designed to protect European industry in the difficult and very costly phase of the ecological transition – the Next generation EU – from imports of materials and materials such as iron, steel, cement, fertilizers, aluminum and electricity ecologically dumped products and therefore at significantly lower prices.
The CBAM enters into force in a transitional phase from 2023 to become fully operational by 2030. The European and Italian manufacturing sectors are on the alert and, first and foremost, the household appliances that would be affected by heavy increases, around 15-30 percent of manufacturing costs.
Anti-CO2 tax: alarm for the white goods industry from Applia Italia
Firstonline interviewed Marco Imparato, general manager of Applia Italy, the Confindustria association which brings together manufacturers of domestic and professional appliances and which, together with other associations, intends to sensitize the government and public opinion on the possible consequences of the application of the CBAM.
"Fundamental premise: Applia Italia fully supports the European Union's decarbonisation objective for 2050 – affirms Imparato – Over the years, household appliances have provided ever higher levels of efficiency, contributing significantly to the climate objectives of the European Union. One of the main objectives of the removal of free allowances from the ETS combined with the Carbon Border Adjustment Mechanism (Cbam) is to reduce climate change by setting a price for CO2 emissions. Therefore, it is essential to prevent carbon leakage so that emissions are not simply shifted elsewhere." The European associations of the manufacturing sector immediately sent objections and urgent requests to Brussels for one extension of taxation to imported finished products. Also because it is still a proposal for a regulation expressed by the Commission and therefore reformable. However, times tend to drag on, as often happens when the central European bureaucracy comes into play.
The anti-Co2 tax and the danger of new relocations
“The industry's alarm is justified as, without the required correction, one will soon be created push for the delocalisation of emissions carbon emissions from the EU, i.e. finished products manufactured outside the EU containing these raw materials will gain a competitive advantage over similar products manufactured in the EU. When CO2 emissions occur outside the EU, there will be no possibility to monitor or regulate these emissions and this represents a severe negative environmental impact, which undermines the very objective of the CBAM”.
The domestic and professional appliance industry originates a total turnover of over 16 billion euros of which exports have largely exceeded 10 billion and counting 35 direct jobs and more than 100 thousand related workers. An Italian excellence with still important innovation centers but which, due to the asian dumping and of that coming from the factories of multinationals located in Türkiye and Eastern Europe, has been losing competitiveness and market share for years.
Is it possible to quantify the damage that CBAM risks causing on the production cost of household appliances? “Let's take the washing machine which contains about 25 kg of steel, 3 kg of aluminum and 25 kg of cement – replies Imparato – With the current cost level of CO2 according to the ETS mechanism of 60 € / ton, this would translate into a cost increase of up to €10 for each washing machine produced in Europe. It is therefore evident that if other regions of the world did not set up a similar mechanism, production in Europe would be disadvantaged. Overall, the planned revisions to the ETS (Emission Trading System), combined with the current CBAM proposal, are effectively unfair to all manufacturing companies based in Europe that use steel, aluminum and concrete and have a negative environmental impact, as they would not eliminate carbon leakage. Furthermore, the proposed changes are not in line -concludes Imparato harshly- with other equally important objectives that the European Union has set for itself, namely supporting European competitiveness and preserving European jobs”. A fundamental observation: those 10 euros would irreversibly multiply on the final consumer price, due to the multiplication of costs in the industrial and commercial chain.
Thousands of jobs at risk
As far as it turns out and, according to business circles in Brussels – also due to pressure from multinationals that have factories outside the Union - the reaction is slow and inadequate and risks producing an immediate distorting effect on the market. "The Commission's proposal on CBAM partially acknowledges this concern - objects Imparato - and the review clause suggests that the EU Commission should investigate the issue and potentially address the issue for finished products with future legislation. However, there is no binding obligation on the Commission to do so and the explanatory memorandum of the Commission's proposal concludes that it would be too administratively complicated to manage the finished products with such a mechanism. Doubting that this complex issue will become less complicated in the coming years, we believe that the Commission should now address the essential legislation to address this issue".
What the European manufacturing industry expects in even more precise terms is very clear: the EU must enact such legislation immediatelyotherwise we risk thousands and thousands of jobs as well as an invasion of highly polluting materials and finished products manufactured in production sites and with equally polluting processes. Exactly the opposite of the objectives of the ambitious Community environmental policy since it is not just a question of the household appliances sector but of all the other gigantic European manufacturing sectors.
