CEF urges Australia to lead Asian CBAM with China, Japan, Singapore, and Korea. (Photo: iStock)
To enhance industrial competitiveness, carbon tariffs have recently become a focal point for both Taiwan and Australia. Taiwan's Ministry of Environment has revealed plans to pilot a local version of the Carbon Border Adjustment Mechanism (CBAM) starting next year.
Meanwhile, Australian independent think tank Climate Energy Finance (CEF) has proposed the idea of an “Asian CBAM,” calling on the Australian government to take the lead in establishing a regional carbon pricing framework together with China, Japan, Singapore, and South Korea.
CEF proposes Asian CBAM including Australia, Japan, Korea, China, and Singapore
On June 5, CEF released a report arguing that carbon pricing is the most cost-effective tool for decarbonizing the global economy. Implementing CBAM targeting key industrial commodities—such as steel, cement, and aluminum—would restore carbon markets, support global emissions reductions, mitigate climate risks, and redirect capital away from fossil fuels and toward clean energy and green industrial products.
The report found that carbon pricing mechanisms are becoming increasingly common in the Asia-Pacific region, with 17 national or subnational systems currently in operation, including China’s Emissions Trading System (ETS).
Experts believe that an Asian CBAM should include China, Japan, South Korea, and Singapore. Australia, which is bidding to host the 2026 UN Climate Conference (COP31), is seen as well-positioned to play a central role in leading this regional carbon tariff effort.
Tim Buckley, CEF Director and former Executive Director at Citigroup, stated that a CBAM led by economically advanced East Asian nations and Australia could rapidly mobilize private capital at scale, accelerate trade decarbonization, and keep pace with the European Union’s CBAM to further intensifying the global decarbonization race.
Buckley also noted that while Australia is a global leader in mining, its exports typically lack added value. By leveraging carbon pricing to attract investment and using renewable energy to process raw materials, Australia could not only meet its decarbonization targets but also bolster its economic development.
Experts believe that as Australia vies to host COP31, it is well positioned to take a leading role in advancing regional carbon tariff initiatives. (Photo: Pixabay)
Australia mulls carbon tariffs as report urges broader adoption across Asia
Elizabeth Thurbon, Professor of International Political Economy at the University of New South Wales, described the report as offering a rare, long-term policy roadmap that aligns economic, environmental, and strategic interests—something Australia hasn't seen in decades.
The report also echoes recent statements by Australia’s newly appointed Energy Minister, Chris Bowen, who told the media on June 1 that Australia may impose carbon tariffs on steel and cement to ensure it meets climate targets on time and to prevent carbon leakage.
As for China’s role, CEF China analyst Caroline Wang emphasized that the shift toward U.S. isolationism presents an opportunity for China to deepen cooperation with other countries. Building an Asian CBAM on the foundation of the EU’s version is one such opportunity, especially given China's leadership in both high-emission industries and low-carbon technologies like solar and wind. This makes China's stance on carbon pricing particularly significant.
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