The Impact of EU Carbon Border Regulation Mechanism on the Export Market Structure of China's Steel Industry

The EU carbon border regulation mechanism was formally passed in May 2023 and officially implemented in January 2026. As the world's largest steel exporter, China is facing the expected impact of external carbon costs. Using the monthly export data of steel products in Chapter HS72 of China from January 2015 to December 2025, this paper uses the double difference method (DID) to study the impact of CBAM on the export market structure of China's steel industry. The study found that after controlling for the exchange rate, the comprehensive PMI of the euro area, the steel price index and the GDP of the importing countries, the DID coefficient changed from positive to negative. The results show that after the CBAM legislation was passed, China's steel exports to the EU decreased by about 10.9% compared with non-EU countries. After further adding the time fixed effect, the conclusion is still robust. This provides new empirical evidence for understanding the carbon tariff transmission mechanism. And it also provides enlightenment for China's steel industry to cope with the impact of CBAM and accelerate the low-carbon transformation.