The Impact of the EU’s CBAM on China’s Carbon Emission Policy

Abstract

The European Union’s Carbon Border Adjustment Mechanism (CBAM) has not only accelerated the development of China’s energy policy, but it has also posed new obstacles. This paper aims to explore the influence of CBAM at various phases of its evolution on policy formulation for China’s six main high-emission industries. The policy analysis indicates that the Chinese government, in response to the demands of CBAM, has expanded its emission reduction programs. These now include sustainable energy endeavors, like hydrogen, alongside traditional high-emission industries. Moreover, the Chinese government has implemented 39 initiatives for energy conservation and emission reduction. These initiatives seek to restructure industrial frameworks via legislative modifications, enhance manufacturing methodologies, and establish stringent emission regulations. Nonetheless, there is insufficient adherence to policy implementation in China’s high-emission industries, failing to provide substantial reductions in emissions. In light of the demands from the CBAM carbon taxes and its own emission reduction objectives, the Chinese government has prioritized enhancing enforcement in the six main sectors.