China’s Ministry of Commerce has responded to the European Union’s latest legislative proposals and implementation rules for the Carbon Border Adjustment Mechanism (CBAM), as the policy enters its full implementation phase from January 1, 2026, as reported by CLS. The comments come as the EU finalizes calculation methodologies, default carbon intensity values, and prepares for a potential expansion of CBAM coverage in the coming years.
The EU introduced CBAM to align the carbon cost of imported products with the bloc’s internal carbon pricing system under the EU Emissions Trading System. After a transitional reporting period, the mechanism is moving toward financial adjustment requirements under which importers must purchase CBAM certificates corresponding to the embedded carbon emissions of covered products.
According to China’s Ministry of Commerce, the EU has recently released multiple CBAM-related legislative drafts and technical implementation rules, including the setting of default carbon emission intensity values. The ministry stated that the default values applied to Chinese products are significantly higher than China’s current average emission levels and are scheduled to increase further over the next three years. It said this approach does not reflect China’s actual industrial conditions or its emissions reduction trajectory.
For the automotive industry, the most consequential development is the EU’s proposal to expand CBAM coverage from 2028 to include downstream products that are intensive in steel and aluminum use. These products include mechanical equipment, automobiles, automotive parts, and household appliances. If adopted, the expansion would extend CBAM beyond primary materials such as steel and aluminum to finished vehicles and components exported to the EU.
Such an expansion would increase compliance requirements for Chinese automakers and suppliers, particularly for lifecycle carbon accounting, emissions data disclosure, and third-party verification. Under CBAM rules, default carbon intensity values may be applied when companies cannot provide recognized emissions data, which could affect cost structures for exporters targeting the European market.
The ministry also commented on recent adjustments to the EU’s internal regulatory framework, including revisions to the 2035 phase-out of internal combustion engine vehicles. According to the ministry, the contrast between external CBAM requirements and internal regulatory adjustments has raised concerns regarding consistency in the application of climate and trade policies.
From China’s perspective, the ministry stated that the current CBAM design exceeds climate policy objectives and could increase compliance costs for developing economies engaged in global manufacturing and supply chains. The comments emphasized that differences in development stages, historical emissions, and technological capacity should be considered when designing climate-related trade measures.
The ministry added that China remains open to cooperation with the EU on climate change and low-carbon development, while stating it will respond to trade measures it considers unfair. It said China will take steps to safeguard the interests of domestic enterprises and maintain the stability of global industrial and supply chains.
With CBAM entering full implementation in 2026 and a proposed expansion to automobiles and auto parts from 2028, the mechanism is expected to become an increasingly important regulatory factor for Chinese automakers and component suppliers exporting to Europe, particularly as carbon footprint disclosure and verification become more central to cross-border automotive trade.
