FILE PHOTO: European Commissioner for the Internal Market Thierry Breton gestures as he communicates on the EU's 5G plan in Brussels, Belgium January 29, 2020. REUTERS/Yves Herman/File Photo

BRUSSELS (Reuters) - The European Union will propose carbon border measures as soon as possible to protect its industries from competitors in countries with less stringent climate policies, the bloc’s industry chief said on Thursday.

The European Commission, the bloc’s executive, is planning to propose a carbon border mechanism in 2021, but on Thursday fielded a call from Spain to bring forward the proposal to the second half of this year.

“We at the Commission will push for one to be installed as soon as possible,” EU industry commissioner Thierry Breton told reporters after a meeting of EU industry ministers, adding that the policy is a “fair and appropriate measure” to support companies as they decarbonise.

Spain’s industry minister Reyes Maroto on Thursday urged the Commission to propose carbon border measures in the second half of this year. The competitiveness of industry is already being affected by “carbon leakage”, she said.

Carbon leakage occurs when a region’s climate policies incentivises industry to move overseas, to countries where they face less stringent, and costly, environmental obligations.

A carbon border mechanism would see the EU impose costs on imports from other countries based on the carbon emissions associated with the imported goods. The aim is to create a level playing field, protecting the competitiveness of EU industries and providing an incentive for overseas firms to also curb their emissions.

The Commission views carbon border measures as crucial to its ‘Green Deal’ vision to completely decarbonise the EU economy by 2050, by reducing the bloc’s emissions to “net zero” by this date.

The EU executive will unveil a ‘climate law’ next week to make the 2050 net zero emissions target legally binding.

Poland is the only member state holding out on supporting the 2050 goal, and is seeking reassurances on the funding the bloc will provide to help countries decarbonise. Those reassurances are hard to offer, as EU countries have still not agreed on the size and shape of the bloc’s next multi-year budget.