EU vs China carbon price (2026)

The EU prices carbon at €80.01; China at ¥86.13 ≈ €11. Same planet, 7× gap. Here's why it exists — and why it's closing at the EU border.

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Side by side

	EU ETS	China ETS
Price	€80.01 (July 13, 2026)	¥86.13 ≈ €11 (Mar 2025)
Type	absolute cap-and-trade	intensity-based (output benchmarks)
Coverage	power + industry + aviation/maritime, ~40% of EU emissions	power + (2024–25) cement, steel, aluminium — world's largest by tonnes
Allocation	auction + shrinking free allocation (0% by 2034)	mostly free, benchmark-based
Border measure	CBAM on imports	—

Why China's price is lower

China's ETS is intensity-based: plants get allowances per unit of output, so the system pushes efficiency rather than absolute cuts, and surplus allocation has kept prices low (the 2026 reset tightens carry-over rules to fix this). The EU has a fixed shrinking cap and full auctioning ahead — scarcity is designed in.

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Why the gap stops mattering for trade

Under CBAM, a Chinese steel exporter's EU-bound tonnes pay the EU price minus what was paid at home: ≈€80.01−€11 ≈ €66 per tonne of CO2 of gap, on the phase-in share. By 2030 that's ≈€32/t CO2 on every exported tonne — the cost advantage of cheap domestic carbon evaporates exactly where it competes with EU producers.

FAQ

Questions on this topic

Is China's carbon price really only €11?

≈¥86/t (Argus, Mar 2025) ≈ €11 at current rates. The 2026 market reset (stricter allowance carry-over, absolute-cap discussions) is expected to push it up, but a 5-7× gap to the EU remains.

Do Chinese exporters pay CBAM?

Their EU importers do — on embedded emissions at the EU-linked price, minus the carbon price effectively paid in China. The deduction is small while CEA ≈ €11.

Which price applies to a multinational with plants in both?

Each plant pays its local system; EU-bound exports from China additionally face CBAM. Group-level carbon cost increasingly favours locating low-carbon production where it's priced highest.