Be Prepared For Future Carbon Tariffs. Are You Ready For Your "Green Threshold"

　　 Recently, the European Parliament formally approved the EU Carbon Border Adjustment Mechanism (CBAM) (carbon tariff for short) after the vote, which will be put into trial operation in October this year and fully implemented in 2026. This means that the world's first carbon import tax will soon be implemented. Will the implementation of this carbon tariff affect the textile industry? How should enterprises respond? For a while, this topic has attracted great attention in the industry.

　　 Small impact

　　 But the future is still a "green threshold"

　　 The carbon border adjustment mechanism (CBAM) refers to countries or regions that strictly implement carbon emission reduction policies and require to pay (return) corresponding taxes or carbon quotas when importing (exporting) high carbon products. The commodities covered by CBAM include iron, steel, cement, aluminum, fertilizer, electricity, hydrogen and indirect emissions under certain conditions. Businesses importing these goods need to pay the difference between the carbon price of the producing country and the carbon quota price of the EU emissions trading system.

　　 Wu Bixuan, a carbon tariff expert and senior partner of Haihua Yongtai (Beijing) Law Firm, introduced in a previous lecture that the EU's carbon tariff (CBAM) measures have attracted more and more attention in China. In addition to the major industries specifically covered by carbon tariffs, other domestic industries have begun to pay attention to the possible impact of this measure on themselves. Among them, the textile and photovoltaic industries are more representative.

　　 Wu Bixuan analyzed that from the starting point of carbon tariff policy, the reason for the EU to implement carbon tariff is to prevent "carbon leakage" - that is, in order to avoid high carbon emission costs within the EU, EU enterprises transfer production to countries with relatively loose emission reduction measures (i.e., industrial relocation). Therefore, in principle, carbon tariffs only focus on those industries with the risk of "carbon leakage", that is, those industries with "energy intensive and trade exposure (EITE)".

　　 The European Commission has an official list of industries with "carbon leakage" risks, which currently includes 63 kinds of economic activities or products, including the following items involving textiles: "preparation and spinning of textile fibers", "manufacturing of non-woven fabrics and their products, except clothing", "man-made fiber manufacturing", and "textile fabric finishing".

　　 On the whole, compared with steel, cement, ceramics, oil refining and other industries, textile is not a high emission industry. Even if the scope of carbon tariffs is expanded in the future, it will only affect fibers and fabrics, and will most likely rank behind oil refining, ceramics, paper making and other industries.

　　 save against a rainy day

　　 Prepare to cross the "green threshold"

　　 In the interview, many experts and entrepreneurs believed that the textile industry would not be directly affected in the years before the implementation of carbon tariffs. However, this does not mean that textile exports will not encounter the EU's green barriers. The measures being formulated by the EU under the policy framework of its "Action Plan for Circular Economy", especially the "Sustainable and Recycled Textile Strategy", should attract the attention of the textile industry. It indicates that textile products must pass a "green threshold" to enter the EU market in the future.

　　 Wu Bixuan once explained in the lecture that there are two main tools in the EU's "Green Trade Toolbox", one is carbon tariffs, and the other is the "Circular Economy Action Plan". The EU will use different tools for different industries. For primary products with high energy consumption and high emissions, the EU uses carbon tariffs as a tool. For other "non carbon tariff covered industries" (such as photovoltaic, textile, battery and other processing products), the EU weaves a "green" rule network under the policy framework of the "circular economy action plan" to limit them.

　　 Hu Kehua, deputy director of the Social Responsibility Office of the China Textile Industry Federation, also agreed. He believes that the EU's sustainability requirements for textiles are strategic and systematic, so the EU's list of carbon leakage in the textile sector will be judged and traced through corresponding tools such as Product Environmental Footprint Disclosure (PEF) and Product Digital Passport. For Chinese enterprises entering the EU textile supply chain, on the one hand, it is necessary to establish a data-driven carbon management mechanism for enterprises and products as soon as possible, find out the family background and reasonably plan the carbon reduction path, but pay attention to the neck effect caused by the difference between the pace of carbon reduction goals of the international supply chain and China's dual carbon goals.

　　 The implementation of the carbon tariff bill has also attracted the attention of many enterprises. He Jianli, the general manager of Zhejiang Jiaren New Materials Co., Ltd., said that 15% of the orders for Jiaren New Materials came from the European Union. Although the enterprise has not received any impact at present, it should be noted that the world's policy game and rule making competition around carbon emissions have begun. The EU officially introduced the "carbon tariff" policy this time, which has put this rule competition on track. We should also be aware that in the future, around the concepts of carbon emissions, green development and so on, we also need to build a carbon trading market and carbon pricing mechanism that are as international as possible.

　　 Wang Zunyuan, general manager of Qingdao Xinwei Textile Development Co., Ltd., is also very concerned about the collection of carbon tariffs. He believes that carbon tariff is an inevitable topic in the future. The implementation of the bill is generally beneficial to society. We must see the situation clearly and improve ourselves. It is understood that Qingdao Xinwei has recently cooperated with many domestic enterprises to carry out a lot of work on carbon footprint and other issues in order to prepare for a rainy day and provide support for EU brands.

　　 Do a good job of compulsory courses

　　 Excavate greater development space

　　 In fact, no matter whether the EU imposes carbon tariffs or not, for industry enterprises, if they want to go further, carbon reduction development is a required course. Fortunately, China's textile industry, which has always been at the forefront, put forward the vision of promoting the industry to achieve zero carbon industry by 2050 five years ago. As the leading unit, the China Textile Industry Federation has taken the lead in carrying out awareness and capacity building of industrial climate action in China and even the world. On June 1, 2021, China Textile Federation officially launched the "30 · 60 China Fashion Brand Climate Innovation Carbon Neutralization and Acceleration Plan". Now, a number of industry leaders, brands and industrial clusters have joined it to jointly promote the sustainable development of the textile industry. Especially in the 2023 China Textile Federation group standard project plan, the key direction also covers green and low-carbon, focusing on dual carbon goals and key tasks, and studying standards such as carbon labels, carbon accounting verification, low-carbon technology and equipment, and green and low-carbon evaluation and management. The industry will accelerate the development of rules and standards for carbon footprint product categories in the textile segment.

　　 Zhejiang Beauty New Materials has been forging a sword for ten years. With the mission of "creating low-carbon regeneration, leading green fashion, and protecting ecological home", adhering to the concept of "high-quality, branding, recycling, regeneration and differentiation", through the research and development of new technologies, it has reborn polyester products such as discarded clothing fabrics, and achieved cycle after cycle, realizing a sustainable cycle from clothing to clothing, Becoming a global leader in green recycled polyester is of great significance for energy dual control carbon peak carbon neutralization.

　　 Qingdao Xinwei started the action of carbon neutrality and carbon peaking as early as 2009, and in 2017, jointly with Professor Zhang Dasheng of Beijing Institute of Fashion Technology, it developed iterative polyester from the production of chips, fiber processing, finished product dyeing and other links, achieving more than 20% of the comprehensive energy saving effect compared with conventional polyester. Now iterative polyester has been widely used, which has contributed to the development of dual carbon industry.

　　 Carbon reduction is a required course, which also contains huge business opportunities. It is hoped that the industry enterprises can take the initiative to layout as soon as possible and find new and greater development space on the way of carbon reduction.