In the face of the third energy crisis in europe, the eu not only accelerated the transformation of the clean energy industry, but also recently adopted a bill on carbon border regulation mechanisms, which means that it will adopt a radical carbon tariff policy and impose a carbon tariff on foreign goods on european markets。
China became europe’s largest trading partner in 2020, when the eu imported more than €380 billion in goods from china, and central europe’s freight trade grew steadily, with china bearing the brunt of carbon tariffs。
If the current price of $80 per ton of carbon in the eu carbon market were to be used, the eu would impose up to $28 billion in carbon tariffs on chinese exports, while the eu carbon price is expected to exceed $100 over the next two to three years。
According to the goldman sachs group, if a carbon tax were to be levied at $100 per ton, china's exports to the eu would be subject to an annual carbon border adjustment tax of up to $35 billion, which represented 7. 7 per cent of china's total exports to the eu。
The fall of eu carbon tariffs will impose a carbon tax on china's exports of more than 10 billion dollars, and which exports will be affected? How can the impact of eu carbon tariffs be addressed? Let's do a deep industry trade reading:
Negative impact of carbon tariffs on chinese exports
The eu is the creator of the carbon tariff concept and will also be the first global organization of carbon-taxed economies。
China's exports to the eu reached euro472 billion in 2021, an increase of 37 per cent over 2020, accounting for 15 per cent of china's total exports and 25 per cent of its total imports, and maintaining its role as the eu's largest trading partner。
China’s exports to the european market are currently concentrated in electromechanical products, textiles, metals and chemicals, which, although not included in the list of the first carbon tariffs in 2025, are likely to spread, albeit to varying degrees, as carbon tariffs are fully covered in eu economies, even in europe。
We need to understand that the imposition of a carbon tariff on a product often affects the entire industrial chain and supply chain, as the carbon emissions of the product come not only from final consumption, but also from supply side and supply chain systems。
In china’s high-carbon industry, steel and aluminium products, the price of the eu’s carbon market is 80 euros per ton, and the biggest impact on steel exports will be over $600 million in carbon tariffs; aluminium products will be subject to nearly $300 million in carbon tariffs。
According to the ico futures report, the price of carbon in the steel sector is 17 per cent of total exports, the price of carbon in aluminium products is 20 per cent of total exports, and a substantial increase in costs implies competition for exports
