China Competence Training Center

Climate and trade policy are becoming increasingly intertwined. At the most recent UN Climate Conference (COP30) in Brazil, carbon pricing and unilateral trade measures were central topics of negotiation and are expected to be discussed under dedicated agenda items in the future. At the heart of these debates is the EU's Carbon Border Adjustment Mechanism (CBAM).

Accompanied by critical reactions within and outside Europe, CBAM entered into force on January 1 of this year after a two-year transitional phase. It aims to balance differences in carbon pricing between EU products and imports. A key issue in the debate concerns the absence of globally accepted, transparent and fair standards for measuring embedded emissions. China plays a key role both in the pro- and contra-debates within the EU on CBAM and in international discussions. In response — among other factors — to CBAM, the Chinese government has accelerated the implementation and development of its national emissions trading system (ETS).

This two-hour expert discussion will provide an up-to-date overview of CBAM implementation, identify regulatory gaps, and discuss current proposals. These include extending the mechanism to up to 180 steel- and aluminium-intensive downstream products and establishing a fund to support sectors where emission reductions are particularly difficult to achieve. The contributions will analyze China's response, ranging from official criticism of CBAM as 'green protectionism' to debates acknowledging the mechanism's relevance. As these discussions increasingly coincide with the development of China's own carbon pricing system, the event will also provide an overview of the sectoral expansion of China's national ETS and plans to introduce emission caps. The event will conclude with implications for international cooperation, compatibility between carbon markets, and the future governance of climate and trade.

Climate, Trade and Carbon Pricing: CBAM and China's ETS