China says EU carbon border adjustment mechanism ‘unfair’

Beijing – China has criticised the European Union’s Carbon Border Adjustment Mechanism (CBAM), describing aspects of the scheme as “unfair” and “discriminatory” towards the country.

The warning came in a statement by the ministry of commerce (Mofcom) on 1 Jan, as the mechanism formally entered into force.

Noting the EU’s release of multiple CBAM-related legislative proposals, a Mofcom spokesman warned that planned extensions to the scheme would amount to trade protectionism.

Among other objections, Mofcom pointed to the setting of default carbon emission intensity values and plans to expand the range of products covered by the scheme.

By assessing “notably high” default carbon intensity values to Chinese products, the spokesperson said, the EU has “disregarded the significant achievements China has made in green and low-carbon development.”

Those intensity values, he noted, are set to be increased annually over the next three years.

“This does not conform to China’s current actual situation or its future development trends,” the spokesperson said, adding that the approach constituted “unfair and discriminatory treatment” towards China.

According to Mofcom, the EU’s practices are suspected of violating World Trade Organisation principles, including “most-favoured-nation treatment” and “national treatment.”

China also raised concerns over draft EU legislation proposing to extend CBAM from 2028 to cover around 180 downstream steel- and aluminium-intensive products, including machinery and equipment, cars and automotive parts, and household appliances.

“These rule designs go beyond the scope of addressing climate change,” the spokesperson said, and carry “clear elements of unilateralism and trade protectionism.”

Such a move, he said, could prompt China’s “serious concern and firm opposition”.

Mofcom further pointed to what it described as inconsistencies in EU policy, noting that Brussels has recently revised its 2035 ban on new internal combustion engine vehicles, easing green regulatory requirements within the bloc.

“On the one hand, the EU engages in protectionism externally under the banner of green policies; on the other hand, it relaxes internal regulation and lowers emissions reduction requirements.”

These, said the spokesperson, are a “typical example of double standards”.