The EU's "carbon tariff" was criticized by many parties during COP28

At the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC) in Dubai, the United Arab Emirates, the EU's "carbon tariff" was criticized by delegates from Brazil, Africa, China, India and other countries and regions.

"If you want to lead the world, you should stop the carbon tariff," Sun Zhen, a first-level inspector at China's Ministry of Ecology and Environment's Department of Climate Change, told Kurt Vandenberghe, director of the European Commission's Directorate-General for Climate Action, at a side event at the China Corner at COP28. Sun Zhen said that China's carbon market mechanism is the result of international cooperation and the result of multiple market Xi, including the European Union and the United States, but this does not mean that China's carbon market will open its doors to the EU's Carbon Border Adjustment Mechanism (CBAM).

This is a microcosm of the unilateral trade policy controversy surrounding "carbon tariffs" and other related issues during COP28. The combination of climate policy and trade policy was one of the focus of the conference. Delegates from a number of countries expressed concern about the EU's "carbon tariff" during the conference. Many participants argued that the CBAM is fundamentally a unilateral protectionist measure that does not serve its stated decarbonization goals or international trade.

In October this year, the CBAM transition phase came into effect. During the transition period, exporters to the EU will only need to report information on a quarterly basis and will not have to pay the actual carbon tariff. However, from January 1, 2026, carbon tariffs will be officially imposed on products imported into the EU, and companies from all over the world in the six industries of electricity, cement, fertilizer, steel, aluminum and hydrogen will face the new compliance requirements of the EU CBAM. In the future, EU carbon tariffs are likely to be extended to more industries.

Representatives of many African countries believe that African economies will be directly affected by the CBAM. Akinwumi Adesina, president of the African Development Bank, said that trade and industrialization in Africa would be severely restricted.

Earlier this year, a report released by the Africa Climate Foundation (ACF) and the Firoz Lalji Institute for African Studies at the London School of Economics and Political Science revealed that the immediate result of the implementation of the EU's CBAM is that Africa could lose up to $25 billion a year. A number of African LDCs will be the most affected by the CBAM.

Adesina said that due to Africa's energy shortage and its main dependence on fossil fuels, especially diesel, this means that Africa will be forced to export raw materials to Europe again, which will further lead to the deindustrialization of Africa.

Denis Mwinkpeng Gyeyir, senior Africa program officer at the Natural Resource Governance Institute, said in an interview with reporters that the EU's carbon tariff should give African countries some immunity, "not the same amount of carbon tax on a region that has almost no emissions in history", and that African countries currently emit less than 4% of global greenhouse gas emissions. Cross-border carbon taxes must be designed with equity in mind.

Pedro Rochedo, an assistant professor at the Federal University of Rio de Janeiro, told China News Service that all sectors in Brazil have reacted greatly to the EU's "carbon tariff" because they are worried that it will affect Brazil's exports. Brazil is a major global exporter of commodities, and there are concerns that this policy will reduce Brazil's export competitiveness and market share. "At the moment, the CBAM is not seen as a 'carbon policy', but as a trade protection measure for exporters from other countries", says Pedro Rochedo.

In fact, ahead of COP28, Brazil, on behalf of the BASIC countries (including Brazil, South Africa, India, and China), submitted a written proposal to the COP28 Secretariat to focus on unilateral trade measures related to climate change and their potential adverse impacts on a fair and just transition in the context of sustainable development and efforts to eradicate poverty.

The proposal makes it clear that all parties should collectively oppose any measures that use climate change as an excuse to restrict trade and investment and create new green trade barriers, such as unilateral carbon border taxes. The proposal states that "this is not in line with the multilateral rules of the World Trade Organization and the Paris Agreement — the principle of equity, the principle of common but differentiated responsibilities and the principle of respective capabilities".