Moscow protested against the European Union’s intention to introduce a carbon tax levied on products imported by the EU bloc for the repayment of debts to be set up for the European Post-Pandemic Recovery Fund, a measure that would be very costly for Russia, a country highly dependent on hydrocarbon exports, reports AFP.

“The desire of our European partners to introduce a carbon tax under the cover of the climate agenda has raised concerns in a number of countries,” said Dmitry Medvedev, former Russian prime minister, now vice-president of the Security Council of Russia.

Such a tax “will also have very serious consequences for the Russian economy, as our core industries, such as ferrous and non-ferrous metallurgy, the chemical and energy industries, could be affected,” Medvedev said, but insisted on Russian oil and coal.

“The financial losses of domestic (Russian) exporters will amount to billions of euro,” he said, referring to estimates by the Russian Academy of Sciences, according to Agerpres.

EU heads of state and government agreed last month to issue a joint debt for a €750 billion post-pandemic recovery fund, of which €390 billion will be accessed by member states as grants and 360 billion as loans.

This money will be attracted by the European Commission on the financial markets and the part of the subsidies will be reimbursed by introducing new taxes at EU level, especially environmental taxes, among them this carbon tax on products imported into the EU bloc and which would be established before 2023.

Describing such a measure as “latent protectionism (…) that will restrict access to Russian goods on the EU market,” Medvedev stressed the need to negotiate this issue both bilaterally with the EU and with relevant international organizations such as the World Trade Organization (WTO).