China Threatens EU After Carbon Border Tax Takes Effect
Listen to the full version
Beijing has vowed to take “all necessary measures” after the European Union’s carbon border tax fully took effect, a move that analysts said could significantly raise costs for Chinese exports such as steel and threaten their competitiveness in Europe.
The Carbon Border Adjustment Mechanism (CBAM), which fully entered into force on Thursday following a two-year transitional phase, requires importers of steel, aluminum, cement, fertilizers, electricity and hydrogen to purchase certificates to cover the carbon emissions embedded in their products. The mechanism is designed to force importers to pay the difference between the carbon price in the country of production and that in the EU, aiming to prevent “carbon leakage,” such as when companies based in the EU could move carbon-intensive production abroad to take advantage of lax standards.
Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.
Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.
- RELATED
- DIGEST HUB
Digest Hub
Back
- The EU’s Carbon Border Adjustment Mechanism (CBAM) took full effect, requiring importers to buy carbon certificates for steel, aluminum, and more.
- Chinese steel exports face increased costs, with CBAM fees for steel slab exports estimated at €144/ton, higher than most competitors.
- China vowed to take “all necessary measures” in response, citing risks to export competitiveness and trade fairness.
- EUROMETAL
- EUROMETAL, the European metals association, published a report in December showing that the European Commission increased the default carbon intensity values for several countries, including China. This report highlights additional pressure on Chinese exports due to the EU's new Carbon Border Adjustment Mechanism (CBAM).
- Fastmarkets
- Fastmarkets, a consultancy, projects that steel products constitute over 70% of the trade volume covered by the EU's Carbon Border Adjustment Mechanism (CBAM). They estimate that using default carbon intensity values would add approximately 144 euros ($168) per ton to the cost of Chinese steel slab exports to the EU. Additionally, Fastmarkets predicts that CBAM-related costs could increase total expenses for importers from several industries by more than 12 billion euros from 2026.
- European Steel Association
- The European Steel Association reported that China exported nearly 2 million tons of finished steel products to the EU in 2024. This volume represented 7.2% of the bloc's total steel imports. This indicates China's significant, though not overwhelming, role in the EU steel market.
- MOST POPULAR
Sign in with Google
Sign in with Facebook
Sign in with 财新