The Carbon Border Management Mechanism (CBAM) proposed by the European Union creates a new trade barrier for Chinese exports, the China Iron and Steel Industry Association (CISA) said on Friday, calling for further negotiations with the bloc.
In In April, the EU approved a world-first plan to impose a tariff on imports of high-carbon goods from 2026, targeting imports of steel, cement, aluminum, fertilizers, electricity and hydrogen.
The levy will pose a major threat to steel producers in China, the world's largest steel exporter, as their production remains more carbon-intensive than the EU.
In October, the new regime entered a testing phase, requiring importers of goods into the EU to report only the carbon dioxide emissions contained in their products. on these products.
The charge will apply from 2026, when it comes into full force.
The carbon border charge aims to put EU industry and foreign competitors on a level playing field , to prevent EU producers from moving to regions with less stringent environmental regulations.
However, this will also increase the cost of steel products supplied to the EU, weakening China's price competitiveness.
“Unilateral creation of the EU CBAM is essentially a new trade barrier created under the auspices of low-carbon technologies,” said the China Iron and Steel Association CISA.
CBAM does not take into account the different stages of development in different countries and contradicts the principle of “common , but differentiated responsibilities,” the association said.
“Once other countries adopt reciprocal and similar trade protection measures to protect their interests, this will lead to increased trade costs and increased risks of trade frictions,” they said in CISA.
“We hope that the EU can carefully consider the cost and operational issues facing steel users in the downstream sector due to changes in import patterns, and establish closer communication with all relevant parties to jointly climate solutions," it added.
The scheme would likely increase China's steel export costs by 4% to 6%, Jiang Wei, vice-chairman, told reporters at a quarterly briefing in late October. chairman of the association.
In September, consultancy Wood Mackenzie said CBAM would likely significantly increase the cost of steel imports from India and China.
India is weighing local tax options to avoid EU tax on carbon emissions after unveiling its plan in May to lodge a complaint with the World Trade Organization over the EU's carbon tax on imports.
