EU may require additional inspections, monitoring, and equipment audits to be performed in non-EU countries
No mechanism has so far been presented that would allow the European Commission to verify the greenhouse gas emissions declared by the importers outside the EU. Additional inspections, monitoring, and equipment audits may be required in non-EU countries. In the EU it is not resolved yet how such inspections may be carried out, documented or funded.
Furthermore, it is not clear how the issue of offsets and compensations will be settled when a supplier has already bought a CO2 credit on a different trading platform at the location of their production facility at a price which is higher or lower than that offered by the EU ETS.
Depending on how the above mentioned issues are eventually resolved, the EU will choose a form in which the new tax will be charged, i.e. whether it will be an excise (customs) duty, a commitment to buy an additional greenhouse gas emission credit at the EU ETS (emissions trading system), or a VAT surcharge for representatives of certain industries.
Potentially, the latter option is the easiest one, because a single rate can be used for both domestic and foreign producers. In this context, a mechanism for reducing the amounts payable by EU-based businesses can be introduced through the purchase of credits at the EU ETS. Then there will be no need for on-site inspections. However, this approach does not look quite correct from the ideological view because it does not facilitate decarbonization outside the European Union.