The European Union has thrown down the gauntlet on global climate, vowing to impose a politically-explosive carbon border tax on imports from recalcitrant polluting states.

Ursula von Der Leyen, the commission’s new president, said the EU cannot allow its companies to suffer a competitive disadvantage as the bloc gallops ahead with its European Green Deal and a net-zero emissions target by 2050.

“There is no point in only reducing greenhouse gas emissions at home, if we increase the import of CO2 from abroad. It is not only a climate issue; it is also an issue of fairness,“ she told the World Economic Forum in Davos.

Mrs von Der Leyen left no doubt that this means zero-tolerance treatment of “free riders” that drag their feet and persist in plundering the global commons, hinting that they would be shut of the “largest single market in the world” and risk losing their trading privileges.

“We for sure will be moving out of fossil fuels,” she said. A draft version of the border tax has been circulating in Brussels for weeks but it is now gathering unstoppable momentum.

The plan for a carbon border adjustment tax has become a neuralgic issue. China has already lashed out, calling it a lurch towards unilateralism and a disguised form of trade protection.