German fabricators are bemoaning that the provisional Carbon Border Adjustment Mechanism (CBAM) agreement protects mills, but not steel users.
The European Council and Parliament reached a provisional agreement on CBAM on Tuesday (see Kallanish passim).
“The climate tariff is fine in theory, but bad in practice,” says Christian Vietmeyer, manager of the German steel and metal processing association WSM. “It protects material producers, but will burden the international competitiveness and export activities of many German industries. And it will drive production out of the EU.”
CBAM, in its current form, “protects EU producers of steel from international competitors that produce more cheaply and with a higher carbon footprint. We welcome that. But this protection must not be at the expense of EU suppliers. We need a system that integrates the entire supply chain,” Vietmeyer explains.
In addition, other countries around the world are considering trade policy countermeasures in response to CBAM. “Protectionism is in the air. This would be another bitter setback for the German export industry,” he adds.
In its current form, CBAM is driving fabricators out of the EU, for existential reasons, to locations with fewer requirements, WSM fears. Vietmeyer concedes that the European Commission means to continue working on measures to avoid carbon leakage in exports. “That would be extremely important. Otherwise, the benefits for the global climate would be lost again and the local jobs along with them,” he concludes.
Christian Koehl Germany