Concerns remain over the lack of clarity and understanding regarding the incoming Carbon Border Adjustment Mechanism (CBAM) as well as the scope of included products, delegates heard during a panel at last week’s UK Metals Expo in Birmingham, attended by Kallanish.
The lack of information about the mechanism was highlighted by Frank Aaskov, director of energy and climate change policy at UK Steel.
“We are still missing key information from the European Union and the Commission on use of default values,” he said.
“There is amongst [EU] importers a very low level of knowledge of what is actually required to comply. What are the financial potential liabilities for buying non-EU steel from 1 January onwards next year?” he noted. “There is a general lack of information and … general lack of experience with the practicality of complying with CBAM. I don’t think the European Commission have helped themselves by being so late in publishing a lot of information.”
Aaskov added that CBAM webinars and engagement with stakeholders have been aimed at primary producers rather than the importers of steel.
He continued that despite CBAM having a year and a half of transition period, the necessary information and awareness has not diffused sufficiently. Market participants do not know what their cost obligations will be after 1 January for importing non-EU steel.
He also raised concerns about steel containing goods not being covered by the current “narrow” scopes of the UK and EU CBAM. Imports of cars or washing machines containing that steel therefore do not currently bear the same costs as domestic manufacturers of these products.
“We think CBAM should be expanded to cover the customers of steel. The EU has now committed to looking at including more downstream products, but they haven’t yet confirmed what these should be,” he said.
He noted that a failure of CBAM could lead to deindustrialisation and the disappearing of demand for steel in the UK and EU markets.
Carrie Bone UK
