After two years of stonewalling, governments agreed at COP30 to hold a series of annual discussions about how their trade policies can enable emissions reductions while helping, rather than hindering, economic development. But analysts warn the process may not be able to achieve much in practice.
Since COP28 in Dubai in 2023, emerging economies including China, India and South Africa have been pushing – in the face of resistance from developed countries – to get the UN climate negotiations to discuss “unilateral trade measures”. These, they argue, include the European Union’s imminent tax on imports of certain high-emission products, known as the Carbon Border Adjustment Mechanism (CBAM).
The Brazilian presidency of COP30 bundled trade and other contentious issues such as finance and emissions-cutting together in the summit’s most high-profile outcome: the “Global Mutirão” decision of the Belém political package.
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Under that, governments agreed to hold dialogues on opportunities, challenges and barriers for international cooperation on trade and climate at the mid-year June talks in Bonn for the next three years as well as an additional “high-level event” in 2028, and then produce a report.
Besides governments, other relevant bodies will be asked to participate in the dialogues, including the International Trade Centre, the United Nations Conference on Trade and Development and the World Trade Organization, the decision says.
On its own initiative, the Brazilian government has also launched what it calls an Integrated Forum on Climate Change and Trade, a three-year effort open to all countries that will bring together officials working on the two issues to consider how trade can support sustainable economic growth.
It is expected to develop ways for trade and climate policies to better intersect across key areas such as the energy transition, the fight against deforestation and carbon accounting
Mixed reactions to trade outcome
The formal move to broaden UN climate discussions on trade beyond their previous narrow placing under negotiations on climate response measures and just transition met with a mixed reaction.
One African negotiator, who is critical of the EU’s carbon border tax plan, told Climate Home News that while the UN dialogues are “a start, it is weak to not have a full COP item on it”. “What’s the point if it’s only at Bonn sessions and not going to COP?” they asked. “It’s like they want to kill it in a polite way.”
Aaron Cosbey, a climate and trade researcher at the European Roundtable on Climate Change and Sustainable Transition, said the dialogues are “very unlikely to have any impact” because most trade-climate topics are “just too hot to handle”.
But Li Shuo, head of the China Climate Hub at the Asia Society Policy Institute, said he hoped the new discussions would help define a constructive role on the issue for the UN climate process, while Arunabha Ghosh, head of the Delhi-based Council on Energy, Environment and Water, said the dialogues represented “progress”.
Ellie Belton, E3G’s trade and climate lead, said referencing trade was a significant step towards addressing trade tensions in UN climate talks. Dialogues, she added, could “offer the space many countries have been calling for to continue collaborative discussions on both the opportunities and challenges, which should help to rebuild trust and unlock enduring solutions”.
The European Union agreed to these dialogues after references to unilateral trade measures – which the bloc regards as a loaded term targeting the CBAM – were downgraded. EU climate commissioner Wopke Hoekstra had told a press conference at COP30 that “we’re not going to be lured into the suggestion that [the EU’s carbon border tax] is a unilateral trade measure, and in that realm we’re also not going to discuss it.”
The final COP30 deal just repeats a previous agreement that “measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade”.
Europe’s contentious carbon border tax
From January 1 2026, the EU will tax imported cement, steel, chemicals, aluminium, hydrogen and fertilisers at a rate depending on the amount of greenhouse gases emitted during their production. The UK will introduce an almost identical policy a year later.
European countries argue that the new levy will level the playing field and ensure companies do not move their production out of the continent to countries with lower carbon taxes and weaker environmental regulations.
They have some international support, with Vanuatu’s climate minister Ralph Regenvanu telling Democracy Now at COP30 that measures such as this are important because they pressure countries to reduce emissions, rather than just relying on voluntary action as much of the Paris Agreement does.
Nonetheless, China, India, Russia, South Africa and others have argued that the European scheme is unfair, as developing countries cannot afford to clean up these industries on their territory or pay higher prices for green versions of the affected products.
The EU’s recent promise to offer “flexibilities” on the CBAM tax to the US also angered many developing countries, particularly as the bloc rejected calls to exempt the world’s least developed countries.
David Ryfisch, co-head of international climate policy at the Germanwatch advocacy group, praised the border tax for helping European industries decarbonise and pressuring governments outside Europe to improve their climate policies.
But, he said, the EU could have made the policy “more acceptable to other countries if it had consulted with them earlier and if the collected revenues were re-channelled to developing countries for them to accelerate decarbonisation domestically”.
Other issues that could be tackled by these UN climate dialogues and the Brazil-led forum include tariffs on green economy goods such as solar panels. The US has imposed tariffs on panels from China and some other parts of Asia. Meanwhile, other countries including India have introduced tariffs on solar panels in an attempt to encourage domestic manufacturing of clean energy equipment.
