China's Ministry of Commerce spokesperson, in a Q&A format on Thursday, expressed that "setting significantly higher default values for the carbon intensity of Chinese products and gradually increasing them over the next three years does not conform to China's current level and future development trends, and constitutes an unfair and discriminatory treatment against China." The EU has released a series of legislative proposals and implementation details regarding its Carbon Border Adjustment Mechanism (CBAM). This mechanism is a flagship climate policy of the EU, aimed at taxing high-emission products entering the EU. The EU Carbon Border Adjustment Mechanism came into effect on Thursday.

The EU Carbon Border Adjustment Mechanism aims to protect its high-carbon industries from unfair competition during the green transition, especially from producers in countries with weaker climate laws. However, the mechanism has been criticized by trade partners for its protectionist tendencies, with the United States even calling on the EU to grant its companies "flexibility."

It is reported that the EU Carbon Border Adjustment Mechanism covers six sectors, including steel, cement, aluminum, and electricity, to prevent EU companies from being undercut by cheaper, more polluting competitors. The European Commission recently published details on the taxes importers may need to pay.

This tax is linked to the EU's own emissions trading system and will be gradually phased out by 2034, which has long supported EU industries. Although the EU is adjusting its electric vehicle plans, the decision to push forward with this mechanism marks a significant commitment to climate policy. Despite the US abandoning climate goals, this new tax is also prompting other countries to take similar measures.

Estimates of how much money this tax could raise vary, but most analysts expect it to exceed 10 billion euros annually. Fastmarkets, a cross-commodity price reporting agency for agriculture, forest products, metals, and mining markets, estimates that the tax will rise to 37 billion euros by 2035, growing by an average of 14% per year starting in 2026 under the base scenario of EU emissions trading system prices. Most of the revenue will go into the EU's own budget.

The Financial Times reported that if importers continue to import without registering under the scheme, they will face fines five times higher than those in the EU emissions trading system. Last December, the European Commission made several revisions to the initial proposal, acknowledging that the proposal was "too cumbersome" during the 2025 testing phase. The revisions include incorporating more downstream products, such as car doors and industrial radiators, and taking anti-circumvention measures.

The European Commission has consistently maintained that the Carbon Border Adjustment Mechanism is a key tool for decarbonization, but countries such as China, India, and Brazil strongly oppose the mechanism, viewing it as a unilateral trade measure disguised as environmental protection. These countries successfully raised the issue at the 30th UN Climate Conference (COP30) held last November for the first time.

Meanwhile, Brussels rejected New Delhi's request for an exemption from the EU Carbon Border Adjustment Mechanism, making trade agreement negotiations between the EU and India more complicated. Including steel products in the new tax has particularly become a focus for China and India.

India's steel production accounts for 12% of the country's carbon emissions, the highest among all industrial sectors. Of its annual 6.4 million metric tons of steel exports, more than a third are sold to Europe.

Chinese metal exporters are expected to be severely affected, with Beijing criticizing the EU Carbon Border Adjustment Mechanism as a protectionist policy. However, the EU's measures have prompted China to expand its own carbon emissions trading system, because if the carbon emissions source has already paid the carbon price, the collected tax would be reduced.

On Thursday, China's Ministry of Commerce spokesperson stated in a statement, "China has noted that the EU has recently issued a series of legislative proposals and implementation details related to CBAM, including setting default values for carbon intensity and planning to expand the scope of covered products. Among these, the EU ignores the significant achievements China has made in green and low-carbon development, sets significantly higher default values for the carbon intensity of Chinese products, and will gradually increase them over the next three years, which does not conform to China's current level and future development trends and constitutes an unfair and discriminatory treatment against China."

The spokesperson continued, "Such practices by the EU not only涉嫌 violate principles such as 'most-favored-nation treatment' and 'national treatment' under the World Trade Organization, but also contradict the 'common but differentiated responsibilities' principle established by the United Nations Framework Convention on Climate Change. The EU has also proposed legislative drafts to expand the scope of CBAM from 2028 onwards to include about 180 types of downstream products, such as machinery, automobiles and their parts, and household appliances, which are steel and aluminum intensive. These rule designs have gone beyond the scope of addressing climate change, showing obvious unilateralism and protectionist colors, and China expresses serious concerns and firm opposition to this."

The spokesperson added, "China has also noted that the EU recently revised its 2035 ban on fuel-powered new cars, relaxing green regulations within the union. On one hand, the EU imposes protectionism under the guise of green policies, while on the other hand, it relaxes regulations internally and reduces emission reduction requirements. This contradictory approach is a typical double standard."

The spokesperson emphasized, "We hope the EU will abide by international rules related to climate and trade, abandon unilateralism and protectionism, maintain market openness, and promote trade and investment liberalization and facilitation in the green field on the basis of fairness, science, and non-discrimination. China is willing to move in the same direction as the EU to cooperate in addressing global climate change challenges, but will resolutely take all necessary measures to respond to any unfair trade restrictions and safeguard its own development interests, the legitimate rights and interests of Chinese enterprises, and the stability of the global supply chain."

Additionally, other countries have also established or expanded their own carbon pricing mechanisms, citing the EU Carbon Border Adjustment Mechanism, such as Brazil, Mexico, Japan, and Colombia. Turkey is also establishing a carbon pricing mechanism. The UK plans to implement its own Carbon Border Adjustment Mechanism starting January 2027, but electricity will be excluded, and it will use a more simplified revenue collection system.

The UK industry generally welcomed the Carbon Border Adjustment Mechanism plan, but warned that the plan would impose high bureaucratic costs on exporters and lag behind the EU's taxation by a year, potentially leading to steel and other high-carbon products being dumped into the UK market.

Sources: rfi

Original: toutiao.com/article/7590421521022124578/

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