Carbon diplomacy: How Europe can steer China’s climate path

At the COP29 in Baku this week, all eyes will be on a new deal on financing developing countries to tackle the climate crisis. But another critical element to watch is how nations are setting their 2035 emissions reduction targets, which must be submitted to the United Nations by February next year. European policymakers should pay particular attention to China’s plan.

The average global temperature has already increased by 1.2°C above pre-industrial levels, according to the European Environmental Agency. Although this remains below the 1.5°C danger threshold set by the Paris agreement, the human and economic costs from climate hazards are mounting worldwide, including in Europe – the recent flash flood in Valencia, the deadliest in modern Spanish history, is a sobering example.

These impacts are likely to worsen. The European continent is warming at twice the global rate, meaning that a 1.5°C rise globally would translate to a 3°C increase for Europeans. With current government pledges projecting a 2.6°C global rise, it is critical for European security and economic stability that the EU presses ahead with its 2040 climate targets and bolsters resilience measures. However, this effort will remain insufficient without a credible plan to encourage the world’s largest emitter to slash its emissions faster.

China is responsible for 90 per cent of the growth in global carbon emissions since the Paris agreement was signed in 2015. Its annual emissions now represent 30 percent of the global total, surpassing those of all developed nations combined. And despite record deployment of solar and wind power in recent years, China still hosts over half of the world’s coal power fleet and 70 per cent of all coal plants currently under construction.

To keep global warming within the 1.5°C warming threshold, China must reduce its emissions by 30 per cent from current levels by 2035.

Whatever policymakers in Beijing decide to submit as their 2035 reduction target will have far-reaching consequences for global climate action. To keep global warming within the 1.5°C warming threshold, China must reduce its emissions by 30 per cent from current levels by 2035. The difference between China adopting a 30 per cent versus a 15 per cent reduction target by 2035 could result in an additional annual carbon output equivalent to the entire emissions produced by the African continent today.

China has long defended its gradual approach to emissions reduction by invoking the principle of “common but differentiated responsibilities,” a core tenet of the Paris agreement, which emphasizes the greater burden wealthy nations should bear due to their historical emissions. But China is on the brink of becoming a high-income nation. It has overtaken the EU in per capita emissions and is set to surpass it in cumulative historical emissions in the latter half of this decade. China’s economic miracle, which has lifted more than 800 million people out of poverty, has been powered by the same fossil fuels that drove Europe’s industrial revolution.

The EU should therefore continue to urge China to align its climate actions with its status as a major power, and challenge Beijing on what its state media calls a “battle of narratives” on carbon reduction. At the same time, European policymakers must also acknowledge the limitations of the UNFCCC, the UN body overseeing international climate negotiations. The Paris agreement lacks an enforcement mechanism to hold countries accountable or a formal process for nations to transition from “developing” to “developed” status. As a result, wealthy countries like Singapore, South Korea, and the UAE face fewer climate obligations than the EU due to an outdated classification based on the economic conditions of 1992, the year that the UN climate convention was established.

For that reason, the European Commission and member states should use all the tools at their disposal to encourage China not only to set the necessary targets but also to ensure their implementation.

Revisiting bilateral initiatives

European policymakers should reassess existing bilateral climate initiatives with China, prioritising those that enhance accountability and governance rather than focusing on cooperation on technology or standalone projects on emissions reduction.

These initiatives once assumed that Europe’s expertise in governance and technology could prompt China to raise its climate ambitions. This premise is now outdated. The barriers to China’s green transition are increasingly political, not technical – they are rooted in powerful domestic interests and in entrenched energy-intensive growth models. Despite a decade of European collaboration in developing China’s carbon market, it is government directives, not carbon prices, that remain the main tool for emissions reduction in China.

This does not mean Europe should abandon cooperation initiatives. Instead, European policymakers should prioritise measures that improve policy accountability, such as bolstering monitoring and reporting mechanisms of carbon dioxide and methane emissions. Europeans should also focus on initiatives that facilitate regulatory alignment, including joint efforts to define sustainable finance taxonomy and capacity-building measures to help Chinese firms meet the EU’s Carbon Border Adjustment Mechanism (CBAM) requirements.

Leveraging Europe’s regulatory power

The EU’s most effective tools are its single market and regulatory power. By imposing sustainability criteria on imports, the EU creates strong incentives for exporters to decarbonise, including Chinese ones. The CBAM has already demonstrated that European regulation, combined with diplomacy, can accelerate decarbonisation of industries abroad.

While Beijing officials brands the mechanism a “green trade barrier” and raises concerns within the WTO, Chinese industries are already adapting. State media now frames EU rules as catalysts for China’s green transition; a government think tank recommended an expansion of China’s carbon market as a response to CBAM. Recently, China  announced the inclusion of cement and steel in its carbon market.

The EU’s new Batteries Regulation, which mandates carbon and recycling benchmarks, is another powerful lever. It has already prompted the Chinese industry to create a domestic battery passport to facilitate compliance, while the Chinese government is planning to tighten domestic recycling benchmarks for electric vehicle batteries.

Moving forward, the European Commission should expand sustainability standards to additional products through the implementation of the Ecodesign for Sustainable Products Regulation. As with CBAM, the external impact of these regulations should be accompanied by a diplomatic strategy. The EU-China dialogue on CBAM serves as an effective model.

Building a high-ambition coalition

Finally, Europe should build a broad coalition of partners to present a united front on an ambitious global climate agenda, including expectations for credible Chinese climate action. This effort is particularly urgent given the likely dismantling of all bilateral US-China climate initiatives under the incoming Trump administration.

US diplomacy has played a crucial role in bringing China to the table to secure new commitments on climate. After the US withdrew from the Paris agreement, the EU took up the mantle on climate diplomacy by convening the Ministerial on Climate Action alongside China and Canada to coordinate major emitters ahead of international climate negotiations. The incoming EU Commission should prioritize this ministerial group. The newly created Executive Vice-President for Clean, Just and Competitive is well-positioned to lead this engagement.

There are ongoing efforts among EU member states to coordinate climate diplomacy priorities, including those regarding China, such as the Green Diplomacy Network of the EEAS, the Group of Friends for an Ambitious EU Climate Diplomacy, and a plurilateral platform organised by several European climate envoys. But these efforts would benefit from closer coordination with allies such as the UK and Canada.

While most global south nations are unlikely to challenge China’s climate stance, there could be notable exceptions. Vulnerable island states such as Maldives and Antigua and Barbuda have already voiced frustration with Beijing’s insufficient action. The European Commission and member states should build a coalition with such countries and others at COP29 in Baku and COP30 in Belém. This coalition could exert collective pressure on major emitters and wealthier developing nations to set more ambitious targets and increase their contributions to international climate finance. In previous COP editions, the High Ambition Coalition, an informal group of countries engaged in climate negotiations, has fostered international consensus on key issues such as the 1.5°C target, net-zero goals, and coal phaseout.

Europe’s climate safety depends on more than just its own targets. It’s also deeply affected by China’s climate policy decisions, which will significantly impact global climate. The EU must use its diplomatic and regulatory toolbox to push for a credible, ambitious commitment from Beijing.