China is devising updated carbon measurement standards to boost its climate initiatives

BEIJING:

China announced plans on Wednesday to better measure the carbon content of its products – a key step in meeting its own climate goals and meeting stricter carbon standards abroad.

The new “carbon footprint management system” outlined by the Ministry of Ecology and Environment will take effect in 2027, setting standards for measuring carbon emissions for about 100 key products across the Chinese economy, according to a policy document.

Initially, China’s calculation standards will apply to high-emitting products such as coal and natural gas as well as exports such as steel, aluminum, lithium batteries and electric vehicles.

The ministry said it hopes to expand the guidance to 200 products by 2030.

It said the new standards would help increase low-carbon consumption, with local governments being asked to develop pilot programs and policies to encourage the use of lower-emission products.

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Analysts said the calculations could also play a key part of China’s efforts to reduce emissions associated with manufacturing products – and avoid trade tensions and high import duties under the new carbon tax at the European Union’s border .

The move shows China is working to catch up with EU legislation that “already set clear rules for measuring and disclosing product carbon footprints,” said Ma Jun, director at the Institute of Public and Environmental Affairs in Beijing.

“China is a latecomer in this, so there are still some gaps to fill,” Ma said.

The calculations could also help China create incentives for companies and individuals to reduce emissions, Ma said.

Commercial pressure

With Europe’s Carbon Border Adjustment Mechanism (CBAM) set to impose tariffs in 2026, countries outside the region have grown concerned about the potential hit to their manufacturing.

Some, such as South Africa, have considered filing complaints with the World Trade Organization. Critics say the EU rules unfairly penalize exporters and do not take into account an exporting country’s overall efforts to reduce emissions.

But moves like China’s to prepare companies to account for their emissions could also be a precursor to enacting its own low-carbon rules — effectively keeping those high-emission taxes domestic, analysts said.

In India, where officials have criticized CBAM as a trade barrier, there has been debate among policymakers about whether existing taxes on the steel industry should be rebranded as carbon taxes, said Ritabrata Ghosh, vice president of ICRA Ltd, an Indian investment information firm. and credit rating agency.

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“Whether this will see the light of day remains to be seen,” Ghosh said.

It is unclear whether China is considering its own carbon tax regime, but it has said it wants to expand carbon credit trading to sectors such as steel and cement.

Wednesday’s plan said China will pay close attention to carbon-related trade policies around the world and push for international alignment of carbon footprint standards.

“It’s about measuring (emissions) in a scientific and fair way,” said Ma, whose organization has compiled a carbon footprint database of more than 2,000 products in China.