China seeks talks on carbon border taxes at COP29

Brussels — China has requested that next week’s 2024 UN Climate Change Conference (COP29) includes talks on carbon border taxes and other “restrictive trade measures” that Beijing says are hurting developing countries, according to a document seen by Reuters.

The request raises the prospect that mounting trade tensions between major economies could disrupt COP29, which starts on November 11 in Baku, Azerbaijan.

China, on behalf of the “BASIC” country group which includes Brazil, India and SA, has submitted a proposal to the UN climate body (UNFCCC) to add talks on “concerns with climate-change related unilateral restrictive trade measures” to the COP29 agenda, the document shows.

The BASIC countries have been stern critics of the EU’s trade-related climate policies, including its anti-deforestation law and its Carbon Border Adjustment Tax (CBAM), which will impose fees on imports of high-carbon goods.

China and India have criticised the levy as protectionist, and said it unfairly penalises developing countries.

The EU says the levy is required to stop European industries — which pay a fee on their CO₂ emissions — from being undercut by cheap imports from countries with weaker climate policies.

A UNFCCC spokesperson confirmed it had received the BASIC countries’ submission.

China’s foreign ministry didn’t immediately respond to a request for comment.

Unless the BASIC countries withdraw their proposal, it will be put to countries at the beginning of COP29, when they must adopt — by consensus — the conference agenda.

Any disputes over the COP29 agenda could delay the start of negotiations and cut into the time left for countries to strike deals — including their main task, to approve potentially hundreds of billions of dollars in new funding to deal with climate change.

What gets onto the agenda for a UN climate summit can have big consequences.

An agreement to add a much-disputed agenda item on financial payments for climate-caused damage at the 2022 UN climate summit, led to the summit creating the world’s first fund to provide this cash.

The EU is likely to oppose the BASIC proposal, diplomats said. The bloc has previously said trade issues should be discussed at the World Trade Organisation, rather than at UN climate talks.

A European Commission spokesperson didn’t respond to a request for comment.

The BASIC countries’ submission says COP29 should hold talks on developing nations’ concerns about climate policies introduced by developed countries, which affect trade.

It said countries should “collectively oppose any measures to restrict trade and investment and setting up new green trade barriers, such as unilateral carbon border adjustment measures and due diligence requirements”.

Reuters