Carbon taxes in Europe undermine the economic competitiveness of China.
Mr. Choeib Boutamine
January 27, 2025
China aims to transform the structure of its economy from an energy-intensive industry to a modernized and clean tech industry by reducing dependence on imported fossil fuels and boosting investment in renewables.
The goal of China is to achieve peak fossil fuel consumption by 2030 and a completely decarbonized system by 2060. This process has already started as the country intensifies the electrification of different sectors (industry, transport, agriculture, etc.).
China’s production of 9.7 million electric vehicles in 2024 is evidence of its strong will and commitment to electrifying the transport sector.
Europe and China are strong trade partners, with their trade exchange amounting to 762 billion dollars in 2024. However, Europe’s tough regulations and taxes on carbon-imported products will greatly affect Chinese products.
In fact, EU regulations have even affected the continent’s economy by leading to the relocation of some EU industries to other regions, hampering the EU’s competitiveness, and strengthening China’s economic dominance.
Meanwhile, the EU’s Carbon Border Adjustment Mechanism (CBAM) will impact the global economy by driving up inflation. Many countries are unable to carry the load of these regulations, particularly developing countries, as they need to develop their industries with the help of fossil fuels while having their share in clean energy growth.
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