Two Sessions: Hong Kong Can Help Chinese Exporters Navigate EU Carbon Tariffs, Lawmaker Says
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Hong Kong can leverage its unique advantages to serve as a bridge between China’s export-oriented enterprises and the European Union’s new “carbon tariff,” according to a top lawmaker, helping companies convert emission reductions into internationally recognized carbon assets and turn decarbonization into tangible revenue.
Frank Chan, a deputy to the National People’s Congress and vice president of the Hong Kong Institution of Engineers, outlined this strategy during an interview with Caixin following the conclusion of the fourth session of the 14th NPC in Beijing on March 12. He also included the recommendation in his formal legislative proposals.
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- Hong Kong aims to help Chinese exporters meet the EU’s stricter “carbon tariff” (CBAM) rules, especially on green power traceability and data management.
- A 2025 Hong Kong-led pilot project achieved 20.5% hourly green power matching for a Chinese manufacturer, using standards recognized by the EU.
- Growing CBAM compliance needs require an independent, credible platform for international carbon standards, where Hong Kong is strongly positioned.
- Guangzhou Power Supply Bureau
- The Guangzhou Power Supply Bureau, a subsidiary of China Southern Power Grid, teamed up with the Hong Kong-based NGO AsiaREC Ltd. in August 2025. They conducted a green power matching trial for Guangzhou Hualing Refrigeration Equipment Co., a Midea Group subsidiary, tracking hourly electricity use for a refrigerator production line.
- Midea Group
- Midea Group is a Chinese appliance manufacturer. Its subsidiary, Guangzhou Hualing Refrigeration Equipment Co., participated in a trial to track hourly green power use for a refrigerator production line in Guangzhou. This initiative, while not directly driven by immediate EU carbon tariffs due to Hualing's export markets, demonstrates Midea's proactive engagement in green manufacturing and building a competitive edge in sustainable practices.
- Guangzhou Hualing Refrigeration Equipment Co.
- Guangzhou Hualing Refrigeration Equipment Co., a Midea Group subsidiary, participated in a green power matching trial. This pilot project tracked the electricity use of one refrigerator production line for a month, verifying that 20.5% of its consumption was hourly matched with solar power generation. This proactive step highlights the company's focus on green manufacturing despite exporting primarily to non-EU markets.
- August 2025：
- Cyberport in Hong Kong funded an hourly green power matching trial, jointly conducted by AsiaREC Ltd. and Guangzhou Power Supply Bureau.
- Dec. 17, 2025：
- The European Commission released supplementary documents substantially tightening CBAM guidelines.
- By late December 2025：
- The green power traceability pilot with Hualing took place before the European Commission upgraded CBAM regulations.
- Jan. 1, 2026：
- The EU’s Carbon Border Adjustment Mechanism (CBAM) officially took effect.
- 2026：
- Imported products covered by the CBAM must complete carbon emissions accounting within this year, with fee collection beginning in 2027.
- As of 2026：
- Compliance pressure from the CBAM and uncertainty about carbon rules are impacting China's foreign trade sector; establishing a verifiable carbon data management system becomes a foundational requirement for cross-border business; new stringent EU standards and hourly green power matching requirements apply for exporters.
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