Following the conference called “A Carbon Border Adjustment Mechanism for Climate - Addressing carbon leakage to strengthen global climate action”, organized in Paris by the European Commission and the French Ministries of Finance, Economics and Climate Transition on February 12, the European Steel Association (EUROFER) has stated that simplification must go hand in hand with ensuring the mechanism’s effectiveness, addressing key issues such as resource shuffling, exports, and the inclusions of products further down the value chain.
However, during the conference, the Commission announced that legislative proposals on crucial aspects of the CBAM will only be presented at the beginning of next year. EUROFER worries that a top priority for securing steel decarbonization investments in Europe, which is tackling resource shuffling, is currently not even listed in the Commission’s planning of upcoming legislative proposals.
EUROFER noted that to ensure the CBAM’s effectiveness, major improvements including introducing a structural legislative solution to the very high risk of resource shuffling; introducing a structural solution to preserve European exports, thus avoiding carbon leakage on global markets; extending the CBAM’s scope to steel-intensive downstream products, are needed urgently. The association stated that launching the CBAM without the necessary improvements would further erode the competitiveness of the European steel industry.