China's New Policy About Steel Export ! What Is the Next Step For Mould Steel?

Beginning in 2026, China Customs implements additional licensing management requirements for steel product exports. The direct motivation for this measure is to systematically address the challenges posed by the EU's Carbon Border Adjustment Mechanism (CBAM). This licensing framework will work in synergy with a series of national action plans, including deepening the carbon market and promoting deep industrial decarbonization. It aims to ensure corporate compliance, manage carbon costs, and fundamentally guide China's steel industry toward a greener and more competitive future.

In 2025, the proportion of China's high-end steel exports to the EU exceeded 50% for the first time, while the national carbon market compliance rate for the steel industry surpassed 95%. Behind these figures lies the final stage of preparation for the full implementation of CBAM, which has now arrived in 2026.In addition to the aforementioned licensing requirements, what other action plans does China have?

1. Deepening the Carbon Market and Improving the Price Mechanism

Expanding Industry Coverage

Include two additional industries—organic chemicals and plastic products—in the national carbon market in 2026, ensuring that all Chinese industries correspond covered by CBAM pay carbon costs domestically.

Pilot the inclusion of indirect emissions (purchased electricity) in the quota allocation for the steel and aluminum industries, fully aligning with the EU CBAM accounting scope.

Establishing a Price Stabilization Mechanism

Set up a carbon market stabilization fund to intervene when carbon prices exceed 120 yuan/ton or fall below 60 yuan/ton.

Introduce carbon futures trading variety to provide enterprises with risk management tools, launching before the third quarter of 2026.

Strengthening Data Quality Supervision

Establish a three-level carbon emission data verification system (national-provincial-enterprise), conducting quarterly checks for key enterprises.

Implement a "one-vote veto" system for data fraud, disqualifying enterprises from all green subsidies and tax benefits for the year.

2. Deep Industrial Decarbonization and Competitiveness Reshaping

Implementing the "Three-Year Action Plan for Low-Carbon Technology universal"

Focus on promoting mature technologies such as electric arc furnace short-process steel making and hydrogen-based direct reduction iron in 2026, aiming to increase the proportion of electric furnace steel from 12% in 2025 to 18%.

Establish a 20-billion-yuan industrial transformation fund, providing subsidies of up to 30% of total investment for projects adopting cutting-edge low-carbon technologies.

Building a Green Steel Certification and Traceability System

Release the national standard for "China Green Steel" before the second quarter of 2026 and conduct equivalence assessments with the EU's low-carbon product certification.

Promote blockchain-based carbon footprint traceability systems in key exporting enterprises to achieve transparent full-chain management from raw materials to finished products.

Promoting Collaborative Carbon Reduction in Industrial Clusters

Build centralized clean energy supply systems in steel industry clusters such as Tangshan, Baoshan, and Rizhao.

Establish an intra-cluster carbon emission quota adjust mechanism, allowing enterprises to trade quotas within clusters.

3. International Response and Rule-Shaping

Accelerating International Mutual Recognition of Green Standards

Complete the alignment of carbon accounting methodologies with the EU by 2026, ensuring Chinese carbon accounting results receive official EU recognition.

Promote the establishment of an "Asian Low-Carbon Product Mutual Recognition Mechanism" under the RCEP framework, covering at least eight major trading partners.

Expanding Diversified Market layout

Implement the "Belt and Road Green Steel Initiative," constructing 3–5 overseas production bases in Southeast Asia and the Middle East that utilize Chinese low-carbon technologies.

Develop "appropriately advanced" green steel product lines tailored to the needs of emerging markets in Africa and Latin America.

Actively Participating in Global Rule-Making

Collaborate with emerging economies like India and Brazil within the WTO framework to promote the establishment of "Fair Transition Carbon Tariff Principles."

Release China's proposal document, "Principles for Fairness in Global Green Trade," before the 2026 UN Climate Change Conference.

4. Enterprise Capacity Building and Support Systems

Comprehensively Upgrading Enterprise Carbon Management Capabilities

Complete rotational training for carbon management personnel in all steel enterprises exporting to the EU by 2026, training an estimated 5,000 professionals.

Develop and promote a "CBAM Compliance Toolkit for SMEs," reducing compliance costs for individual enterprises by over 40%.

Innovating Green Financial Products

Introduce "Carbon Reduction Performance-Linked Loans," directly linking enterprise loan interest rates to the extent of carbon intensity reduction.

Pilot a "Carbon Quota Pledge Financing" model, allowing enterprises to use future carbon quotas as collateral for transformation funds.

Summarize

China's strategy for addressing CBAM is transitioning from initial adaptation to proactive leadership. The year 2026 marks not only the starting point for CBAM's full implementation but also a critical turning point for remodeling the international competitiveness of China's green steel industry. With the working together of the domestic carbon market and industrial policies, China is poised to cultivate a group of globally competitive green steel enterprises while responding to carbon barriers, transforming the EU's green challenge into a historic opportunity for the transformation and upgrading of Chinese manufacturing.

This transformation will follow the path of "short-term compliance — medium-term upgrading — long-term leadership." The focus in 2026 will be on ensuring enterprises smoothly navigate the compliance period while accelerating technological layout; by 2028, low-carbon steel is expected to become the mainstream for exports; and by 2030, global leadership is anticipated across multiple technological pathways, with substantive participation in international rule-making. This path is both pragmatic and ambitious, reflecting China's unique approach to climate governance and industrial upgrading.