The EU must urgently implement new comprehensive trade measures which, among other things, set 15% import caps for carbon flat and stainless steel, and 5% for carbon longs, while applying tariffs universally to all products and countries. So says Michael Pinter, US Steel Kosice director of governmental and EU affairs, as well as European Economic and Social Committee (EESC) member.
The tariffs should also be applied to countries having free trade agreements with the EU, with no loopholes, exemptions or free rides, Pinter notes in his latest EESC article read by Kallanish.
Steel origins should be traced with “melted and poured” rules to stop circumvention. Carry-overs quotas need to be eliminated and strong above-quota tariffs enforced to send an effective price signal to the market, ideally at 50% – comparable to the US tariff level, he adds.
Protectionism will not be enough, however, with energy critical to competitiveness. Pinter suggests immediate energy price relief and network tariff rebates for energy-intensive industries, and overhauled electricity markets to decouple fossil-fuel prices from electricity prices – an alternative market design to transfer the cost benefits of low carbon electricity to consumers. Moreover, a dedicated hydrogen funding mechanism is needed to power the industrial transition.
As for CBAM, “current loopholes risk undermining its effectiveness, necessitating legislative action to preserve free allowances for exports to non-EU countries. CBAM scope should also expand to cover downstream steel-intensive sectors,” Pinter notes.
For scrap, the Commission should introduce comprehensive monitoring, potential export duties or tariff quotas, and enhanced enforcement against illegal exports, he adds.
The EESC proposed these measures and more in its opinion report on the EU Steel and Metals Action Plan published in July. One request was for the release of the legislative draft on CBAM, a hot topic of late among EU steel industry participants since CBAM benchmark values are still unknown.
The European Association of Non-Integrated Metal Importers & Distributors (Euranimi) recently rejected the “melt and pour” rule, saying it is “impossible to verify in practice”. Various studies published in recent months have meanwhile showed there is unlikely to be an EU scrap shortage in the coming decade as steelmaking decarbonises, with supply growth keeping pace with demand.
Adam Smith Austria
