China’s Ministry of Commerce has criticised the European Union’s carbon border adjustment mechanism (CBAM), which came into force on 1 January 2026, saying the rules impose unfair trade restrictions on Chinese exporters and risk undermining global cooperation on climate change.
In a statement responding to recent EU legislation and implementation details, the ministry said China had taken significant strides in green and low-carbon development yet the EU had set default carbon intensity values for Chinese products that are markedly higher than Beijing’s assessment of actual emissions. The ministry warned those baseline figures will rise annually over the next three years, which it said would further skew competitiveness and amount to discriminatory treatment.
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The ministry argued that the EU measures appear to conflict with World Trade Organization principles such as most‑favoured‑nation and national treatment. It also invoked the United Nations Framework Convention on Climate Change principle of “common but differentiated responsibilities”, saying the EU’s approach ignores historical emissions and differing development levels.
Beijing voiced particular alarm at an EU draft law proposing to expand CBAM’s scope from 2028 to include some 180 downstream products that are steel‑ and aluminium‑intensive, including machinery, automobiles and household appliances. The ministry said such a move would take the mechanism beyond a climate tool and into protectionist territory.
China also noted recent EU adjustments to its 2035 ban on new petrol vehicles, suggesting the bloc is loosening domestic green rules even as it tightens measures abroad. The ministry described this as a double standard: protecting EU markets in the name of green policy while easing internal requirements.
While reiterating a willingness to work with the EU on global climate action, the ministry warned it would “take all necessary measures” to protect China’s development interests, the legitimate rights of Chinese companies, and the stability of global supply chains. It did not specify which measures it might deploy, leaving options such as trade remedies, diplomatic negotiation, or formal dispute settlement at international fora.
Analysts say the dispute highlights growing tension between trade governance and climate policy. Developing economies argue that unilateral measures risk shifting costs and distorting markets, while the EU maintains CBAM is meant to prevent carbon leakage and encourage global decarbonisation. For exporters in China, increased compliance costs and administrative burdens could affect marginal producers and certain industrial sectors more than others.
Chinese officials called on the EU to adopt fair, science‑based and non‑discriminatory rules, keep markets open, and refrain from unilateral protectionist steps. They said cooperation remains possible but must respect international trade and climate frameworks.
The clash over CBAM could test the resilience of global supply chains and influence future negotiations on trade, climate and industrial policy. As the mechanism is implemented and refined, both sides face pressure to balance genuine climate ambition with rules that do not unintentionally penalise developing economies’ progress towards lower emissions.
Key Takeaways:
- China criticises the EU carbon border adjustment mechanism (CBAM) as discriminatory and inconsistent with WTO and UNFCCC principles.
- Beijing says default emission intensity values for Chinese products are set too high and plans to respond with necessary measures to protect its industries and supply chains.
- The EU plans to expand CBAM coverage to downstream products from 2028, raising concerns about trade protectionism and higher costs for developing countries.
- China affirms willingness to cooperate on climate action but urges the EU to adopt fair, science-based, non-discriminatory rules.
