The Impact of Carbon Tariff Policies on China’s Steel Export Industry-A Perspective Based on the EU Carbon Border Adjustment Mechanism

Abstract

As the world's first cross-border carbon tariff policy, the EU Carbon Border Adjustment Mechanism (CBAM) will profoundly impact international trade patterns and carbon reduction pathways upon implementation. Steel, among the first industries included, faces heightened scrutiny due to its high energy consumption and emissions. This study examines China's steel exports to identify practical challenges confronting the sector under carbon tariffs, analyzes specific policy impacts and potential risks, and proposes corresponding countermeasures. Research findings indicate that carbon tariffs will significantly increase export costs for Chinese steel enterprises in the short term, undermining their price competitiveness in the EU market—particularly for bulk products like plates and pipes with higher carbon intensity. In the medium to long term, however, this external pressure mechanism is expected to accelerate China's steel industry's green and low-carbon transformation. It will promote R&D and application of clean technologies such as hydrogen-based steelmaking, electric arc furnace processes, and carbon capture, while also compelling China's domestic carbon market mechanisms to align with international standards. This paper further proposes establishing a multi-dimensional response system encompassing technological innovation, policy coordination, and international cooperation to enhance the resilience and competitiveness of China's steel industry within the global low-carbon trade landscape.