Eurofer has noted improvements made by EU ministers to the proposed reform of the Carbon Border Adjustment Mechanism (CBAM), but warns loopholes remain that could weaken both Europe’s climate ambitions and industrial competitiveness.
Meeting today, the Economic and Financial Affairs Council (ECOFIN), which gathers the EU27 Economy and Finance Ministers, adopted its position on the European Commission’s CBAM review proposal. The European Steel Association (EUROFER) noted several improvements, including stronger references to “melt and pour” rules and clearer recognition of the risk that producers outside Europe may circumvent the system through ‘resource shuffling’ practices.
Axel Eggert, EUROFER’s Director General, said. “The Council has taken a step in the right direction, but it will not be sufficient to prevent carbon leakage, as major loopholes remain on circumvention, downstream products and exports. If they are not closed, carbon emissions will shift, not fall.”
One of the biggest concerns for the steel sector is resource shuffling. This occurs when foreign producers send lower carbon steel to Europe while continuing to sell more carbon-intensive steel elsewhere. While the Council proposal better recognises this risk, it still relies largely on uncertain corrective measures rather than preventing it from happening in the first place.
The Council also proposes extending CBAM to around 200 additional steel-containing products. EUROFER welcomes this extension but warns this fails to provide a comprehensive and structural coverage to many steel-intensive goods, leaving parts of Europe’s manufacturing value chain exposed to imports that do not face comparable carbon costs.
EUROFER also regrets that Member States maintained the Commission’s proposal to include pre-consumer steel scrap as a CBAM precursor without first carrying out a dedicated impact assessment. The association warns this could create unintended consequences for scrap markets and Europe’s circular economy.
The Council also amended article 27a, which sets conditions for temporary removal of goods from the CBAM scope. Rather than relying on such an unpredictable “emergency brake” mechanism, a more effective approach would be to adjust the pace of the CBAM/free allocation transition.
Finally, the steel industry expressed concern that little progress has been made on a long-term solution for European exports. While CBAM applies to imports entering the EU market, European producers exporting abroad continue to face carbon costs that many international competitors do not.
