How CBAM is accelerating carbon pricing worldwide
The European Union’s Carbon Border Adjustment Mechanism (CBAM) is encouraging trading partners to introduce national carbon pricing systems, enabling governments to retain carbon revenues within their own economies rather than paying charges at the EU border. As carbon pricing becomes increasingly important for global climate governance, a new study by Bruegel examined whether the CBAM has accelerated the adoption of these policies outside the European Union.
Evidence that CBAM is shaping climate policy beyond Europe
The study found that the CBAM has the potential to influence climate policy well beyond the EU. Since the mechanism was first announced in 2019, there has been a significant increase in the number of countries introducing, developing or implementing national carbon pricing systems.
Among high-income economies, the share of countries announcing or adopting carbon pricing policies rose from 19.5% in 2019 to 33.3% in 2025. During the same period, the proportion of low-income countries implementing similar measures increased from 4% to 12%.
Using data covering 163 countries between 2014 and 2025, and analysing each country’s trade exposure to sectors covered by the CBAM, the researchers found that, on average, a one percentage point increase in CBAM exposure raises the likelihood of adopting a carbon pricing policy by around 2%.
CBAM encourages policy alignment among non-EU countries
The findings suggest that greater exposure to the CBAM strengthens global spillover effects for carbon pricing. Early evidence indicates that several non-EU countries are willing to align their domestic carbon pricing frameworks with the European mechanism.
The United Kingdom’s own carbon border policy, due to enter into force in January 2027, will cover the same sectors as the EU CBAM, with the exception of electricity. Canada and Australia are also considering carbon border measures. If members of the Open Coalition on Compliance Carbon Markets were to introduce their own CBAM-style mechanisms, even more countries could be encouraged to establish domestic carbon pricing systems.
How China is responding to the CBAM
According to an analysis by the Center for Strategic and International Studies (CSIS), China, despite publicly criticising the CBAM, is moving towards establishing its own carbon management and accounting framework.
Although these initiatives remain far from full implementation, China has already taken concrete steps to develop an advanced system for carbon monitoring, reporting and verification (MRV). Such progress could ultimately contribute to reducing the country’s greenhouse gas emissions.
However, the analysis warns that if the CBAM were to evolve into a predominantly protectionist instrument rather than a decarbonisation policy, incentives for third countries, including China, would weaken considerably. From this perspective, the revision of the EU Emissions Trading System (ETS) presented by the European Commission in July, which slows the gradual implementation of the CBAM, may reduce momentum for the adoption of national carbon pricing systems outside the EU.
On one hand, China appears to be building the institutions and incentives required for a long-term emissions reduction strategy. On the other, the government has yet to fully deploy these new policy tools, largely because of concerns over potential economic disruption.
CBAM and China’s aluminium industry
A particularly significant case concerns China’s aluminium industry. The sector accounts for 60% of global aluminium production and approximately 5% of China’s carbon emissions. Nevertheless, within this CBAM-covered industry, Beijing has committed to ensuring emissions peak before 2030.
Since 2017, Chinese producers have relocated up to 30% of state-owned aluminium production capacity to regions with abundant renewable electricity.
In 2024, the central government introduced province-specific renewable energy targets for the aluminium industry, ranging from 21% in Shandong to 70% in Yunnan. In 2025, Beijing also established new targets to increase recycled aluminium production, which requires only 5% of the energy consumed by conventional primary aluminium production.
At the same time, China has accelerated the development of zero-carbon industrial parks, designed to gradually replace the country’s existing network of around 15,000 industrial parks.
According to the analysis, these measures helped keep global aluminium emissions broadly stable between 2020 and 2022, despite continued growth in production. Nevertheless, progress in reducing emissions remains uneven across industrial sectors and provinces.