CBAM to change dynamics of global steel trade: Kardemir CEO

Carbon Border Adjustment Mechanism (CBAM) and the EU’s Green Deal are expected to change the dynamics of the global trade in the coming years, as producers’ which will not invest in reducing their carbon emissions will lose their competitiveness due to the new carbon tax burden, Ismail Demir, chairman of Turkey’s largest integrated long steel producer Kardemir said.

“Turkey, which is making half of its exports to the European Union, could not remain out of these regulations,” Demir said in a statement that he made at the company’s 29th Ordinary General Meeting May 30.

Following the announcement of the Carbon Border Adjustment Mechanism (CBAM) by the European Union, Turkey unveiled its ‘Green Deal Action Plan’ in July 2021 as a road map to realize the transformation of Turkey to a more source-efficient and a green economy.

Highlighting that CBAM will directly affect steel, aluminum, cement and fertilizer sectors, Demir said they have focused on low-carbon steel production in recent years.

“In this regard, our studies are ongoing to build our new planned blast furnace with a technology that fits our green steel target,” he said, adding that the new blast furnace will raise Kardemir’s crude steel capacity by 1 million mt/year to 3.5 million mt/year.

Kardemir is aiming to reduce carbon emissions by 15% until 2030 and to become carbon neutral by 2053, the company said, without citing the current carbon emission level of Kardemir.

Kardemir currently has a 2.5 million mt/year liquid steel capacity and produces billet, rebar, wire rod, sections and angles. It has expanded its product range over the last few years to include rails, railway wheels, thick wire rods, and heavy sections.

Turkish mills’ rebar export prices inched lower on May 30, amid lower mill offer prices and lower-priced deals in a slow market.

Platts assessed Turkish exported rebar at $572.50/mt FOB May 30, down $2.50/mt on day, according to S&P Global Commodity Insights data.

Cenk Can