After nearly two years of negotiations, the European Parliament formally approved the EU Carbon Border Adjustment Mechanism (CBAM) after a vote. This means that the world’s first carbon import tax is about to be implemented, and the CBAM bill will take effect in 2026.
my country will face a new round of trade protectionism
Under the influence of the global financial crisis, a new round of trade protectionism has emerged, and my country, as the world’s largest exporting country, has suffered greatly.
If European and American countries continue to use climate and environmental issues to impose “carbon tariffs”, China will face a new round of trade protectionism. Since there is currently no unified international carbon emission standard, once countries such as Europe and the United States impose “carbon tariffs” and implement carbon standards that suit their own interests, other countries can also impose “carbon tariffs” according to their own standards, which will inevitably spark a trade war.
China’s energy-intensive export products will become the subject of “carbon tariffs”
At present, the countries that propose to impose “carbon tariffs” are mainly developed countries such as Europe and the United States. China’s exports to European and American countries are not only large in volume, but also concentrated in high-energy-consuming products.
In 2008, China’s exports to the United States and the European Union were mainly mechanical and electrical products, furniture, toys, textiles and raw materials, with total exports of US$225.45 billion and US$243.1 billion respectively, accounting for 66.8% and 67.3% of China’s total exports to the United States and the European Union. .
Most of these export products are products with high energy consumption, high carbon content and low added value, and can easily become the subject of “carbon tariffs”. According to a World Bank research report, if the “carbon tariff” is fully implemented, Chinese manufacturing may face an average tariff of 26% in the international market. Export-oriented companies will increase their costs, and export volume may therefore decline by 21%.
Will carbon tariffs have an impact on the textile industry?
Carbon tariffs cover the import of steel, aluminum, cement, fertilizers, electricity and hydrogen. The impact on different industries cannot be generalized. The textile industry is not directly affected by carbon tariffs.
So will carbon tariffs be extended to textiles in the future?
This depends on the policy starting point of carbon tariffs. The reason why the EU implements carbon tariffs is to prevent “carbon leakage” – which refers to EU companies transferring production to countries with relatively loose emission reduction measures (i.e. industrial relocation) in order to avoid the high carbon emission costs within the EU. So logically speaking, carbon tariffs only focus on those industries that are at risk of “carbon leakage”, that is, those industries that are “energy intensive and trade exposed (EITE)”.
Regarding which industries are at risk of “carbon leakage”, the European Commission has an official list, which currently includes 63 economic activities or products, among which the following are involved in textiles: “Preparation and spinning of textile fibers”, “Nonwovens and “Manufacture of its products, except clothing”, “Manufacturing of man-made fibers”, “Finishing of textile fabrics”.
Generally speaking, compared with steel, cement, ceramics, oil refining and other industries, textiles are not a high-emission industry. Even if the scope of carbon tariffs is expanded in the future, it will only affect fibers and fabrics, and it will most likely be ranked second. Behind the oil refining, ceramics, paper and other industries.
At least in the first few years of implementation of the carbon tariff, the textile industry will not be directly affected. However, this does not mean that textile exports will not encounter EU green barriers. The various measures being developed by the EU under the policy framework of its “Circular Economy Action Plan”, especially the “Sustainable and Circular Textiles Strategy”, should attract the attention of the textile industry. It indicates that textiles must pass a “green threshold” to enter the EU market in the future.
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