June 2024 | The European Union’s introduction of the Carbon Border Adjustment Mechanism (CBAM) is expected to significantly impacting the dynamics of global trade, particularly within the steel industry.
As a measure integrated with the EU’s Green Deal, CBAM aims to regulate carbon emissions by imposing a carbon tax on imports that don’t meet certain environmental standards. This move is designed to encourage producers globally to invest in reducing their carbon outputs or risk losing their competitive edge.
Ismail Demir, chairman of Kardemir, Turkey’s largest integrated long steel producer, emphasized the transformative impact of CBAM on Turkey, a country that directs half of its exports to the European Union. To align with these new regulations, Turkey has developed its ‘Green Deal Action Plan’ as a roadmap towards a greener, more resource-efficient economy. Kardemir itself is spearheading efforts to produce low-carbon steel, with plans to enhance their production capacity while significantly reducing carbon emissions by 2030, and aiming for carbon neutrality by 2053.
However, the implementation of CBAM has raised concerns among European steel service centers and distributors. According to a working group meeting hosted by European distributors’ association Eurometal, they are worried about Asian suppliers seeking workaround solutions, threatening the European metalforming industry and service centres.
“Scared by the impact of CBAM, some large customers (1st tiers) are looking for external alternatives outside European borders and opting to import ready-to-use steel products, in order to circumvent the regulation,” Eurometal says in its meeting summary. “This trend deeply worries service centres, especially considering the current period of moderate activity. Already facing significant investments in decarbonisation and cost optimisation, CBAM throws another wrench into an already challenging situation,” it adds.
The situation calls for a collective response from the industry. Recent gatherings of Eurometal underscore the urgency of finding collaborative and innovative solutions to maintain the competitiveness of the European steel processing industry under the new CBAM stipulations. There’s an expressed commitment within the industry to continue these discussions, with plans to meet again in 2025 in Bönen, Germany, highlighting a proactive approach to adapting and thriving under the evolving regulatory landscape.
About Eurometal
Eurometal, the European Federation of Associations of Steel, Tube, and Metal Merchants, traces its origins to 1950. This was the same year the European Community for Coal and Steel (ECSC) was established, marking a new era in cooperative economic development across Europe. Concurrently, national steel stockholding federations from Western Europe came together to found FIANATM (Fédération Internationale des Associations de Négociants en Aciers, Tubes et Métaux) in Basel, Switzerland. The primary goal of FIANATM was to unite national associations of steel, tube, and non-ferrous metals merchants from OECD countries.
In 1999, FIANATM merged with the Brussels-based FENA (Fédération Européenne des Négociants d’Aciers), the European Federation of Steel Stockholders, leading to the formation of Eurometal.
By 2011, Eurometal further broadened its member base to encompass companies engaged in international steel trading. A significant restructuring occurred in 2015 during the General Assembly, where it was decided to simplify Eurometal’s structure to better represent and focus on the voices of all EU steel, tubes, and metals distribution sectors.
