China weighs response to EU carbon border tax

CBAM expected to have significant long-term impact on trade with EU, warns speaker at country’s annual parliamentary session

Plans by the EU to impose a carbon tax on imports under its Carbon Border Adjustment Mechanism (CBAM) will have a significant long-term impact on China’s exports to the bloc and could trigger a recalibration of carbon-pricing structures in Asia-Pacific, analysts say. The CBAM will put a carbon tax on incoming goods to the EU at the border, replacing a system where free allowances were issued to carbon-intensive industries. The free allowances system will be phased out on a sliding scale as the CBAM is phased in, starting in 2026 and with a complete phase-out by 2034. “The impact on China-EU trade cannot be ignored. China should be prepared for a rainy day” Jun, National Academy of Deve

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