Chongqing- On May 6, China and the European Union (EU) celebrated the 50th anniversary of their diplomatic relations, marking half a century of collaboration on various fronts, including environmental issues. In a recent interview with Bridging News, Dimitri de Boer, chief representative of ClientEarth's Beijing Office, emphasized the significance of this enduring partnership.

"The green transition in developing countries is the world's biggest opportunity, and China is leading in green sectors. Cooperation between China and others is crucial," de Boer said. 

Carbon Border Adjustment Mechanism (CBAM), the world's first "carbon tariff," is set to take effect in 2026, marking a significant environmental challenge for China and the EU moving forward. The initiative aims to curb greenhouse gas emissions by imposing a levy on imports based on their embedded carbon content. As one of the EU's largest trading partners, China's energy-intensive industries could face higher costs unless they shift toward more sustainable practices.

"CBAM isn't a tariff," de Boer explained. "It ensures that the carbon costs faced by European producers are reflected in imports."

The potential impact on Chinese industries, particularly the steel sector, is significant. De Boer noted that if Chinese companies produce "green" steel- low-carbon or carbon-neutral steel- they could gain a competitive advantage over traditional, higher-emission methods. "Chinese steelmakers will have an incentive to produce environmentally friendly steel, speeding up China's steel sector's transition," he added.

For Chinese companies subject to CBAM, de Boer advised focusing on understanding and reducing their carbon emissions in production. "Focusing on green technologies could give you a competitive edge in Europe, as European producers will face higher costs due to their emissions system."

As the global transition to a low-carbon economy accelerates, carbon trading has become a key component of reducing emissions across some of the most energy-intensive sectors. The carbon market encourages companies to innovate and adopt low-carbon technologies by allowing efficient producers to monetize their surplus allowances, while higher-emission industries must purchase credits to avoid penalties.

“The carbon market helps reduce emissions in sectors like power generation, steel, and aviation,” de Boer said. "For example, the aviation sector, which is hard to decarbonize, could purchase allowances from sectors like steelmaking, where emissions reductions are cheaper."

Environmental efforts in China's manufacturing hub of Chongqing have also been notable. From April 28 to 30, experts gathered at the China Council for International Cooperation on Environment and Development Roundtable in Chongqing to discuss strategies for the megacity's green and low-carbon transformation.

Chongqing, a key manufacturing base in western China, has significantly reduced its environmental impact. In 2024, the city's production of new energy vehicles reached 953,000, positioning it among the top three producers in China. Moreover, the energy consumption per unit of added value in the industrial enterprises above the designated size fell by 12.7% compared to 2020, surpassing the national average by 2.6 percentage points.

"Chongqing has done an excellent job in restoring and protecting the Yangtze River, especially over the past five years," de Boer noted. "This includes the fishing ban, the Yangtze River protection law, and progress in soil conservation and pollution control."

"Chongqing's ability to balance environmental efforts with rapid economic growth is impressive," de Boer said. "Other countries can learn a lot from its approach."