【By Observer News, Xiong Chaoran】On the morning of November 10th local time, the 30th Conference of the Parties (COP30) to the United Nations Framework Convention on Climate Change officially opened in Belém, Brazil.
The largest French current affairs and political news weekly, L’Express, reported that day that the EU's carbon border tax once again became a focal point at this meeting. This environmental mechanism from Europe may hinder negotiations at COP30. The tax aims to impose carbon prices on imported goods, similar to Europe's existing carbon pricing mechanism, where companies pay for their pollution.
In short, high-polluting imported products cannot be cheaper than locally produced European products. The industries involved include steel, aluminum, cement, fertilizers, electricity, and hydrogen, with China and India being major producers in these sectors.
Therefore, the report pointed out that due to ongoing global trade tensions and the EU's carbon border tax policy, this has "added insult to injury" to relations between the EU and China and India, even "angering" the two countries. In fact, in recent years, the EU's attempt to unilaterally impose a carbon border tax has been seen by many countries around the world as a form of "green protectionism."
Local time on November 10th, Belém, Brazil, COP30 United Nations Climate Summit, André Corrêa do Lago, President of COP30, at a press conference. Visual China
L'Express pointed out that for these two Asian countries, if the EU's carbon tax policy is fully implemented in 2026, it would mean significant revenue losses.
French media cited a report titled "Responses of the Global South to Trade Institutional Changes in the Era of Climate Change," stating that India's GDP could decrease by up to 0.5%. For China, Le Monde emphasized in April 2024 that China's "steel boom" is extremely important to the EU, especially in building renewable energy infrastructure.
It is known that the calculation of the EU carbon tax is based on the principle that importers—usually large trading companies—must declare the carbon dioxide emissions generated from overseas production. If these emissions exceed European standards, companies must purchase "emission credits" at the EU's carbon price.
However, this price is still rising, currently about 70 euros per ton. "It may exceed 100 euros by 2030," said Pierre Leturcq of the European Environment Policy Institute (IEEP) on November 10th local time to AFP, adding that such an increase "could almost double the price of each ton of steel."
Therefore, Chinese and Indian companies have expressed strong dissatisfaction and, along with Bolivia, have demanded that "unilateral trade measures" be included on the agenda of COP30 to discuss this carbon tax.
The report stated that the emergence of this issue once again exposed the power competition between the so-called "Global South" and the "Global North."
According to Leturcq, the main goal of Europe is to "prevent carbon leakage," i.e., to prevent polluting companies from moving production to countries with weaker climate regulations. The EU claims this is a so-called "benign tool" aimed at encouraging other parts of the world to raise environmental standards.
However, affected countries consider this a disguised trade barrier. Additionally, developing countries, including China and India, have clearly pointed out that this carbon tax policy violates the "common but differentiated responsibilities" principle in the Paris Climate Agreement.
According to this principle, the earliest industrialized countries bear more responsibility for global warming, and therefore cannot impose the same corrective and compensatory measures on other countries.
Leturcq believes that these tensions may interfere with substantive discussions on climate change response and mitigation measures financing at COP30, which require billions of euros in funding.
According to the report, setting aside the disputes among all parties, it is expected that the EU's carbon tax policy will only generate about 1.4 billion euros in annual revenue starting in 2028.
Leturcq believes that the impact on carbon emissions may be "minimal." Therefore, some experts suggest that the EU should use part of the tax revenue to support decarbonization projects outside Europe — this move could also help ease tensions with Southern European countries.
Observer News noted that the debate over the EU's carbon border tax had already emerged at the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change held in Dubai, UAE, in 2023.
"Politico.eu," the European edition of "Politico," reported on December 5, 2023, that Brazil, one of the strongest opponents of the EU's carbon border tax, tried to bring up this issue at COP28 with the support of China and even a broad consensus among large emerging economies. Brazil has long considered the EU's move as "discriminatory" and warned that it could hinder global emission reduction efforts.
The report at the time pointed out that this development reflects the growing tensions between the EU and its trade partners. Earlier in 2023, China had raised concerns about the EU's carbon border tax at the World Trade Organization, explicitly stating that the measure does not conform to global trade rules.
"Politico.eu" pointed out that at COP28, China did not publicly oppose the EU's carbon border tax, but the key wording in the negotiation text draft on December 5, 2023, was consistent with the content of the documents China submitted to the United Nations in September.
The report stated that in the negotiation text draft, China recommended that countries should express "serious concern" in the COP28 declaration regarding measures taken by some countries, including sanctions against low-carbon products, restrictions on technology investment and cooperation, green barriers, discriminatory legislation, and plurilateral restrictions.
According to a previous report by the Economic Daily, the EU's "carbon border tax" officially started on October 1, 2023, entering a transitional phase. The EU plans to begin formal taxation in 2026, raising import thresholds according to the EU's emissions trading system, meaning that products exported to the EU will face related emission taxes. Although this initiative aims to promote the development of green technologies, it inevitably raises concerns about market protection and may conflict with WTO principles. The EU itself acknowledges that the carbon border tax has dual purposes, namely maintaining European industrial competitiveness and encouraging other countries to adapt more quickly to the EU's green policies.
Main trade partners of the EU, such as the United States, China, India, Brazil, South Korea, South Africa, and other countries in Asia, Africa, and Latin America, have stated that the EU's unilateral taxation is a form of "green protectionism." The EU's carbon tax will further complicate international trade and increase the export costs of non-EU manufacturers. In addition, EU consumers will face higher import prices because the reporting obligations related to CBAM will incur higher costs, which may be passed on to consumers.
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