Chongqing - "European Union is our main export area," said Zhang Ning, the general manager of the import and export division in Southwest Aluminium (Group) Co., Ltd. European Parliament's Committee on Environment, Public Health and Food Safety (ENVI) passed a carbon tariff last month.
The carbon tariff is also known as the Carbon Border Adjustment Mechanism (CBAM).
The CBAM means that as long as the carbon pricing, which may be a carbon tax, carbon fee, or the carbon pricing of the recognized carbon trading system in the production area is lower than the carbon price of the European Union Emissions Trading System (ETS), CBAM certificate must be purchased to make up the price difference once imported into the European Union.
Zhang said that once all European Union members approve the carbon tariff in the second quarter of this year, it will be officially effective.
"There is a huge difference in carbon prices between the Chinese and European markets; the impact of carbon tariff on the company is huge," said Zhang.
Zhang added the current price per ton of China's carbon emission is about 60 Yuan (about USD 8.65), while last month, the price per ton of European carbon emission was about 100 EUR (about USD 106.81), almost 13 times difference.
Southwest Aluminium is actively promoting the green transformation, meeting the carbon emission requirement of the European Union as much as possible to reduce this huge price difference.
According to Gavin Tjong, the managing director of Cushman & Wakefield in West China, in order to strengthen the link between environment and finance, the Intermediate People's Court of the Chengdu City of Sichuan Province is considering whether to impose corresponding penalties on enterprises that do not meet carbon emission and carbon neutrality standards.
In addition, there is a lack of talent growing in the southwest. This is also why the government positioned the Chengdu-Chongqing economic circle as the fourth growth pole, attracting more attention, investment, and talents.
"We have helped many Fortune 500 companies to be located in Chengdu and Chongqing," said Tjong. "So you have to be a messenger and tell them that western China is an amazing place because it has a big market with great potential."
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