IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v282y2023ics0360544223022065.html
   My bibliography  Save this article

Analysis of China's steel response ways to EU CBAM policy based on embodied carbon intensity prediction

Author

Listed:
  • Li, Wei
  • Liu, Xing
  • Lu, Can

Abstract

The EU Carbon Border Adjustment Mechanism (CBAM) has decided to impose carbon tariffs on some imported goods after 2026 based on their embodied carbon emissions. And China, as the fourth largest steel importer in the EU, its foreign trade in steel will undoubtedly be affected. The Multi-regional Input-output and Single-regional Input-Output models were used to calculate the embodied carbon in China's steel exports to the EU from 2000 to 2020. Under the current development scenario, the EU carbon tariff rate in 2034 will reach about 5.5%, exceeding the average profitability of steel in recent years. In order to reduce carbon tariffs, a strategy to accelerate the development of carbon reduction capacity is proposed from the perspective of reducing embodied carbon. Meanwhile, considering the development trend of the tradable green certificate system and the controversial nature of CBAM in the WTO framework, a countermeasure to promote green certificates offsetting carbon tariffs is proposed from the policy perspective, and the cost increase rate generated by this measure is calculated with the scenario settings, and the cost increase rate is only 1.1% under the best situation.

Suggested Citation

  • Li, Wei & Liu, Xing & Lu, Can, 2023. "Analysis of China's steel response ways to EU CBAM policy based on embodied carbon intensity prediction," Energy, Elsevier, vol. 282(C).
    • Handle: RePEc:eee:energy:v:282:y:2023:i:c:s0360544223022065
    DOI: 10.1016/j.energy.2023.128812
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544223022065
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2023.128812?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Overland, Indra & Sabyrbekov, Rahat, 2022. "Know your opponent: Which countries might fight the European carbon border adjustment mechanism?," Energy Policy, Elsevier, vol. 169(C).
    2. Byeongho Lim & Kyoungseo Hong & Jooyoung Yoon & Jeong-In Chang & Inkyo Cheong, 2021. "Pitfalls of the EU’s Carbon Border Adjustment Mechanism," Energies, MDPI, vol. 14(21), pages 1-18, November.
    3. Karl W. Steininger & Christian Lininger & Lukas H. Meyer & Pablo Muñoz & Thomas Schinko, 2016. "Multiple carbon accounting to support just and effective climate policies," Nature Climate Change, Nature, vol. 6(1), pages 35-41, January.
    4. Chen, Cuicui & Zeckhauser, Richard, 2018. "Collective action in an asymmetric world," Journal of Public Economics, Elsevier, vol. 158(C), pages 103-112.
    5. Lin, Boqiang & Zhao, Hengsong, 2023. "Evaluating current effects of upcoming EU Carbon Border Adjustment Mechanism: Evidence from China's futures market," Energy Policy, Elsevier, vol. 177(C).
    6. Böhringer, Christoph & Bye, Brita & Fæhn, Taran & Rosendahl, Knut Einar, 2017. "Targeted carbon tariffs: Export response, leakage and welfare," Resource and Energy Economics, Elsevier, vol. 50(C), pages 51-73.
    7. Ang, B. W., 2005. "The LMDI approach to decomposition analysis: a practical guide," Energy Policy, Elsevier, vol. 33(7), pages 867-871, May.
    8. Edward J. Balistreri & Daniel T. Kaffine & Hidemichi Yonezawa, 2019. "Optimal Environmental Border Adjustments Under the General Agreement on Tariffs and Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1037-1075, November.
    9. Silitonga, A.S. & Masjuki, H.H. & Ong, Hwai Chyuan & Sebayang, A.H. & Dharma, S. & Kusumo, F. & Siswantoro, J. & Milano, Jassinnee & Daud, Khairil & Mahlia, T.M.I. & Chen, Wei-Hsin & Sugiyanto, Bamban, 2018. "Evaluation of the engine performance and exhaust emissions of biodiesel-bioethanol-diesel blends using kernel-based extreme learning machine," Energy, Elsevier, vol. 159(C), pages 1075-1087.
    10. Wiedmann, Thomas & Wilting, Harry C. & Lenzen, Manfred & Lutter, Stephan & Palm, Viveka, 2011. "Quo Vadis MRIO? Methodological, data and institutional requirements for multi-region input-output analysis," Ecological Economics, Elsevier, vol. 70(11), pages 1937-1945, September.
    11. Zhang, Xiao-Han & Zhu, Qun-Xiong & He, Yan-Lin & Xu, Yuan, 2018. "A novel robust ensemble model integrated extreme learning machine with multi-activation functions for energy modeling and analysis: Application to petrochemical industry," Energy, Elsevier, vol. 162(C), pages 593-602.
    12. Xuan, Yanni & Yue, Qiang, 2017. "Scenario analysis on resource and environmental benefits of imported steel scrap for China’s steel industry," Resources, Conservation & Recycling, Elsevier, vol. 120(C), pages 186-198.
    13. Shen, Hongtao & Yang, Qing & Luo, Le & Huang, Nan, 2023. "Market reactions to a cross-border carbon policy: Evidence from listed Chinese companies," The British Accounting Review, Elsevier, vol. 55(1).
    14. Schinko, Thomas & Bednar-Friedl, Birgit & Steininger, Karl W. & Grossmann, Wolf D., 2014. "Switching to carbon-free production processes: Implications for carbon leakage and border carbon adjustment," Energy Policy, Elsevier, vol. 67(C), pages 818-831.
    15. Kuik, Onno & Hofkes, Marjan, 2010. "Border adjustment for European emissions trading: Competitiveness and carbon leakage," Energy Policy, Elsevier, vol. 38(4), pages 1741-1748, April.
    16. Zhong, Jiarui & Pei, Jiansuo, 2022. "Beggar thy neighbor? On the competitiveness and welfare impacts of the EU's proposed carbon border adjustment mechanism," Energy Policy, Elsevier, vol. 162(C).
    17. Antimiani, Alessandro & Costantini, Valeria & Kuik, Onno & Paglialunga, Elena, 2016. "Mitigation of adverse effects on competitiveness and leakage of unilateral EU climate policy: An assessment of policy instruments," Ecological Economics, Elsevier, vol. 128(C), pages 246-259.
    18. Yang, Changjiang & Yan, Xiaoxuan, 2023. "Impact of carbon tariffs on price competitiveness in the era of global value chain," Applied Energy, Elsevier, vol. 336(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Junbo & Ma, Zhenyu & Fan, Xiayang, 2023. "We are all in the same boat: The welfare and carbon abatement effects of the EU carbon border adjustment mechanism," MPRA Paper 118978, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lin, Boqiang & Zhao, Hengsong, 2023. "Evaluating current effects of upcoming EU Carbon Border Adjustment Mechanism: Evidence from China's futures market," Energy Policy, Elsevier, vol. 177(C).
    2. Zhong, Jiarui & Pei, Jiansuo, 2022. "Beggar thy neighbor? On the competitiveness and welfare impacts of the EU's proposed carbon border adjustment mechanism," Energy Policy, Elsevier, vol. 162(C).
    3. Jia, Zhijie & Wu, Rongxin & Liu, Yu & Wen, Shiyan & Lin, Boqiang, 2024. "Can carbon tariffs based on domestic embedded carbon emissions reduce more carbon leakages?," Ecological Economics, Elsevier, vol. 220(C).
    4. Overland, Indra & Sabyrbekov, Rahat, 2022. "Know your opponent: Which countries might fight the European carbon border adjustment mechanism?," Energy Policy, Elsevier, vol. 169(C).
    5. Nabernegg, Stefan & Bednar-Friedl, Birgit & Muñoz, Pablo & Titz, Michaela & Vogel, Johanna, 2019. "National Policies for Global Emission Reductions: Effectiveness of Carbon Emission Reductions in International Supply Chains," Ecological Economics, Elsevier, vol. 158(C), pages 146-157.
    6. Marc Baudry & Alienor Cameron, 2022. "The case for a Carbon Border Adjustment: Where do economists stand?," Working Papers hal-04159819, HAL.
    7. Aliénor Cameron & Marc Baudry, 2023. "The case for carbon leakage and border adjustments: where do economists stand?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 435-469, July.
    8. Sun, YongPing & Xue, JinJun & Shi, XunPeng & Wang, KeYing & Qi, ShaoZhou & Wang, Lei & Wang, Cheng, 2019. "A dynamic and continuous allowances allocation methodology for the prevention of carbon leakage: Emission control coefficients," Applied Energy, Elsevier, vol. 236(C), pages 220-230.
    9. Banerjee, Suvajit, 2021. "Conjugation of border and domestic carbon adjustment and implications under production and consumption-based accounting of India's National Emission Inventory: A recursive dynamic CGE analysis," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 68-86.
    10. Wang, Junbo & Ma, Zhenyu & Fan, Xiayang, 2023. "We are all in the same boat: The welfare and carbon abatement effects of the EU carbon border adjustment mechanism," MPRA Paper 118978, University Library of Munich, Germany.
    11. Stefan Nabernegg & Pablo Muñoz, Birgit Bednar-Friedl, Michaela Titz, Joanna Vogel, 2017. "Effective national mitigation policies for reductions in production and consumption based emissions," EcoMod2017 10462, EcoMod.
    12. Yvonne Wolfmayr & Elisabeth Christen & Hendrik Mahlkow & Birgit Meyer & Michael Pfaffermayr, 2024. "Trade and Welfare Effects of New Trade Policy Instruments," WIFO Studies, WIFO, number 70732, January.
    13. Bellora, Cecilia, 2020. "Carbon Border Adjustment and Alternatives," Conference papers 333210, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Perdana, Sigit & Vielle, Marc, 2022. "Making the EU Carbon Border Adjustment Mechanism acceptable and climate friendly for least developed countries," Energy Policy, Elsevier, vol. 170(C).
    15. Jingzhi Zhu & Yuhuan Zhao & Lu Zheng, 2024. "The Impact of the EU Carbon Border Adjustment Mechanism on China’s Exports to the EU," Energies, MDPI, vol. 17(2), pages 1-18, January.
    16. Hana Nielsen & Astrid Kander, 2020. "Trade in the Carbon-Constrained Future: Exploiting the Comparative Carbon Advantage of Swedish Trade," Energies, MDPI, vol. 13(14), pages 1-25, July.
    17. Fang, Yuan & Yu, Yugang & Shi, Ye & Liu, Jie, 2020. "The effect of carbon tariffs on global emission control: A global supply chain model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    18. Felbermayr, Gabriel & Peterson, Sonja & Wanner, Joschka, 2022. "The impact of trade and trade policy on the environment and the climate: A review," Kiel Working Papers 2233, Kiel Institute for the World Economy (IfW Kiel).
    19. Shen, Hongtao & Yang, Qing & Luo, Le & Huang, Nan, 2023. "Market reactions to a cross-border carbon policy: Evidence from listed Chinese companies," The British Accounting Review, Elsevier, vol. 55(1).
    20. Li, Xuelian & Zhou, Wei & Lo, Tang-Yun & Lin, Jyh-Horng, 2024. "International climate policy dilemmas: Examining effective carbon tariff and cap-and-trade regulation from a sustainable insurance perspective," Energy Economics, Elsevier, vol. 134(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:282:y:2023:i:c:s0360544223022065. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.