The EU's new carbon tariff, known as CBAM, is causing major headaches for Chinese steel exporters. Smaller firms with greener production methods are hit hardest because they lack the administrative resources to fill out complex carbon intensity spreadsheets required for each shipment. The rules demand detailed data on factory coordinates, upstream material emissions, and production processes, which many Chinese companies cannot easily provide. This creates a paradox where cleaner producers struggle to prove their lower emissions, while larger, more polluting firms may have an easier time due to better administrative capacity. The situation highlights a key flaw in CBAM design: it prioritizes paperwork over actual carbon performance. For the carbon market to work globally, the reporting burden must match the capabilities of smaller players, or the tariff will punish the wrong companies.
