EU threatens to scrap trade deal if Australia doesn’t ditch coal

Australia’s bid to reach a free-trade deal with Europe just got a little harder, due to its refusal to set a hard target to reach net-zero carbon emissions.

The Australian Broadcasting Corp. reported Thursday that lawmakers in Brussels are warning they will not ratify any trade deal with Australia until it does more to reduce its emissions. It cited Kathleen van Brempt, a key parliamentary trade coordinator, 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 shot at Prime Minister Scott Morrison’s government, the European Parliament voted to move forward with a carbon levy on products from countries lacking serious pollution reduction programs, the ABC said. While it didn’t give a cost to the potential tariffs, it said Australia’s exports to Europe were worth more than A$20 billion ($15.5 billion) in 2016.

Europe’s moves show 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 election win for Joe Biden, a supporter of greater action to reduce greenhouse gas emissions blamed for global warming, has further made Australia look like 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. Trade Minister Dan Tehan, appointed to the portfolio in December, has said he wants to complete the deal this year.

An email to the office of Tehan seeking comment wasn’t immediately answered.