The definitive application of the Carbon Border Adjustment Mechanism (CBAM) could lead to an increase in steel import prices of around 15%, Italian trade association Assofermet warns.
“CBAM introduces a sort of new ‘environmental customs duty’ to discourage steel imports … We welcome a collective commitment to promote a sustainable economy and reduce the environmental impact of our industry but we believe that greater attention should be paid to the economic consequences of the CBAM regulations which, if not radically revised, risk undermining the competitiveness of an important part of the EU manufacturing sector,” Assofermet steel division president Paolo Sangoi says in a note sent to Kallanish.
“The cost of steel coming from non-EU territories could increase by up to 15%. This would have important repercussions on the entire Italian and European economy,” he continues, adding that the mechanism is extremely complex and its procedures remain unclear.
The CBAM mechanism currently applies only to some steel products, which impacts end-users and downstream companies, exposing them to unfair competition with importers of competing finished products who would face no restrictions or taxation, Sangoi observes.
The transitional CBAM period will expire on 31 December 2025. Until that time, buyers will have to fulfil only a part of the mechanism’s regulations. Assofermet hopes that before the start of the definitive period, on 1 January 2026, the EU will be able to modify the approach of the measure “to reconcile the just and necessary environmental transition with the inevitable economic consequences that will arise from the implementations of the EU Green Deal and Fit For 55”, Sangoi concludes.
According to European Commission data, in 2022 over 31 million tonnes of steel were imported into member states, Kallanish notes.
Natalia Capra France