The European Commission recently announced the proposal of carbon border tariffs, and the legislation was expected to be completed in 2022. The period of transitional was from 2023 and the policy will be implemented in 2026.

The purpose of levying carbon border tariffs was to protect domestic industrial enterprises and prevent energy-intensive products of other countries without being restricted by pollutant emission reduction standards from competing at relatively low prices.

The legislation was mainly aimed at energy and energy-intensive industries, including steel, cement, fertilizer, and aluminum industries.

The carbon tariffs will become another trade protection to the steel industry imposed by the EU, which will also restrict Chinese steel exports indirectly. The carbon border tariffs will further increase the export cost of China’s steel exports and increase the resistance of exports to the EU.