Navigating CBAM in China: Exploring Policy Pathways for Guangdong Province

The report analyzes how the EU's Carbon Border Adjustment Mechanism (CBAM) affects Guangdong province, a major hub for iron, steel, and aluminium exports. While initial exposure is limited, the report warns that pressure will increase as CBAM expands. It recommends that Guangdong accelerate industrial decarbonization—specifically through electrification and green hydrogen for steel and renewable energy for aluminium—and establish a carbon pricing system compatible with the EU Emissions Trading System (ETS). Additionally, it suggests that EU policymakers enhance dialogue on emissions accounting, allocate CBAM revenues to support climate action in developing economies, and engage in international platforms like the Climate Club.

• Guangdong province is identified as a highly exposed region due to its role as a hub for exporting carbon-intensive products like aluminium, steel, and iron; although current exposure to CBAM is limited, pressure on exporters is expected to increase as the mechanism expands and other countries implement similar policies.
• To maintain competitiveness, Guangdong should prioritize industrial decarbonization—specifically transitioning iron and steel from coal to electrification and green hydrogen, and increasing renewable energy for aluminium—and align its carbon pricing with the EU Emissions Trading System (ETS) to reduce CBAM costs.
• The report suggests three actions for EU policymakers: improving dialogue on emissions accounting and verification, using CBAM revenues to fund climate action in developing economies, and utilizing international platforms such as the Climate Club to align rules on embedded emissions.

APA

NewClimate Institute (2025). Navigating CBAM in China: Exploring Policy Pathways for Guangdong Province. http://www.newclimate.org/resources/publications/navigating-cbam-in-china-exploring-policy-pathways-for-guangdong-province

Chicago

NewClimate Institute. Navigating CBAM in China: Exploring Policy Pathways for Guangdong Province. 2025. http://www.newclimate.org/resources/publications/navigating-cbam-in-china-exploring-policy-pathways-for-guangdong-province.

Wikipedia

{{cite report |author=NewClimate Institute |title=Navigating CBAM in China: Exploring Policy Pathways for Guangdong Province |date=22 April 2025 |url=http://www.newclimate.org/resources/publications/navigating-cbam-in-china-exploring-policy-pathways-for-guangdong-province |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2025navigating, author = {{NewClimate Institute}}, title = {{Navigating CBAM in China: Exploring Policy Pathways for Guangdong Province}}, institution = {NewClimate Institute}, year = {2025}, month = apr, url = {http://www.newclimate.org/resources/publications/navigating-cbam-in-china-exploring-policy-pathways-for-guangdong-province}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }