• Xiaowen Hu

From aviation to raw materials: exploring the role of China in the EU’s CBAM

Amid increasing concerns over climate change, the European Commission pushed forward a proposal for establishing a Carbon Border Adjustment Mechanism on the 14th of July 2021, increasing carbon prices on imported goods to avoid carbon leakage.[1] Following the EU Emission Trading System (ETS), the European Green Deal and the climate law, this proposal is another green step that exemplifies the EU’s interest in coordinating global climate governance.

Due to its large volume of carbon emissions and close trade relations with the EU, China is an important player in the implementation of the Carbon Border Adjustment Mechanism. On the one hand, China is committed to fighting against global warming, which can be noticed from President Xi’s pledge to reach carbon neutrality by 2060.[2] The inclusion of the “Paris Agreement” in the EU-China Comprehensive Agreement on Investment (CAI) reaffirms the willingness of climate cooperation between two parties. On the other hand, the EU’s climate efforts are not always appreciated by China. Beijing regards the aviation carbon tax as a form of “green protectionism.”

Based on the cooperation and quarrel between the EU and China in global climate governance, this paper tries to understand the role China plays in the Carbon Border Adjustment Mechanism. After reviewing the bilateral dispute over the aviation carbon tax, this paper analyses the influence of the Carbon Border Adjustment Mechanism on China. This paper highlights that, whenever the EU, as a strategically autonomous actor, pushes forward its sovereign market regulations and green policies, worldwide promotion of these measures can influence China’s decarbonisation agenda and thus lead to tensions despite growing cooperation between the two. In case of conflicts, the EU needs to consider how to make the most of its market tools.

Aviation: lessons from the past