The European Commission has confirmed plans to shield its steel, aluminium and other heavy-industry exporters from carbon costs, either by exempting them from the bloc’s emissions levy or reimbursing the charges. Climate Commissioner Wopke Hoekstra said the proposed scheme would tap revenues from the EU’s forthcoming carbon border tariff and could pay out about €70 million next year, with detailed rules due later in 2025. Brussels expects the border tariff itself to generate €2.1 billion annually by 2030. The move undercuts a core argument used by Canada’s Liberal government for maintaining its own industrial carbon-pricing system. Prime Minister Mark Carney scrapped the federal consumer carbon tax immediately after taking office on 14 March 2025 but left in place levies on large emitters in sectors such as steel, cement and oil and gas, saying they were needed to keep Canada in line with major trading partners. Opposition politicians and business groups contend the EU’s shift removes that rationale. Conservative leader Pierre Poilievre and Senator Leo Housakos said Ottawa’s industrial tax will now ‘punish’ Canadian exporters, while Canadian Exporters & Manufacturers warned earlier this year that the levy risks driving investment to jurisdictions with looser climate rules. Industry letters from oil-and-gas producers and manufacturers have likewise asked the government to rethink the policy. The Carney administration has not commented on whether the European decision will prompt changes to Canada’s framework, but economists note the divergence complicates Ottawa’s goal of balancing climate ambitions with trade competitiveness ahead of the next federal budget due in the autumn.