The European steel market is awaiting more clarity on the future of trade by June 2021. At that time, it will be known if the European Commission (EC) will implement carbon border adjustment measures (CBAM) and further extend safeguard measures.
Experts discussed the topic at Friday’s EUROMETAL Steel Trade Day 2020 event attended by Kallanish.
David Boubil from the EC explained that authorities are now reviewing the results of the consultations on CBAM, which closed at the end of October. He noted that a proposal by the Commission on this topic should be coming in June 2021.
The EC is considering different options, but the overall goal is to ensure that the actions taken within Europe to tax CO2 emissions are also applied to goods imported from some key markets. Boubil stressed that the measure would not be a straight forward taxation, but more an extension of the existing carbon price system (ETS).
CBAM would be part of the overall “Green Steel” strategy of the EC, supported by further actions, including diplomacy. For that reason, it should also contain a system to calculate existing CO2 taxation measures in other parts of the world. This means it will take into account only the differential between CO2 measures in Europe and other parts of the world.
In addition to CBAM, by June 2021 it will also be clearer if existing safeguard measures will be maintained. Yuriy Rudyuk from Van Bael & Bellis noted that the European Commission is not particularly eager to keep them in place, in part to avoid further responses from commercial partners. Eurofer, on the other hand, is lobbying for the measures to be extended.
“The outcome of the negotiations is unpredictable, but it could be somewhere in the middle between the position of the EC and Eurofer,” Rudyuk said. He added, nevertheless, that a cancellation of safeguard measures would probably see a rise in anti-dumping investigations.