Carbon tax can help European chemical industry

In the United Kingdom, Nexant Energy and Chemicals Advisory consultants report that a carbon tax is necessary to incentivize the reduction of GHG emissions in Europe and indirectly in exporting markets. If implemented correctly, it could benefit the cost competitiveness of the European chemical industry.

The most transparent mechanism is to tax products based on the ratio of tons of CO2/t of delivered goods. The pricing mechanism for CO2 should consider the price of capture using best available technologies. It has the merits of incentivizing the reduction of emissions (i.e., volumes) and also the development of better CO2 capture technologies.