Exports fall sharply, CBAM will not benefit European steel industry

According to Gerber news dated 20 September 2024, the current form of the Carbon Border Management Mechanism (CBAM) is not conducive to the development of the European steel industry. This opinion was expressed by the heads of EU companies at a special meeting in Rome, reports S&P Global.

According to Antonio Marcegaglia, CEO of the Italian company Marcegaglia, CBAM is a bad tool, its mechanism is not well thought out, it is almost impossible to use, it is limited to the first stage of the production cycle and will not work.

Dimitri Menecali, CEO of the Italian company Arvedi AST, believes that CBAM should be expanded to include Scope 3 emissions, otherwise the mechanism will be useless. However, it is complex, and complex means inapplicable and evasive.

The CEO group noted that stainless steel scrap from Asian producers accounts for a relatively low share of the commodity mix due to supply constraints. This has led to the widespread use of carbon-nickel iron (NPI).

He noted that although China's investment in renewable energy is significantly higher than in Europe, the impact of high NPI usage on the carbon footprint of Asian stainless steel producers is anomalous.

Bernardo Velazquez, CEO of Spanish company Acerinox, also noted that the cross-border carbon regulation mechanism is an experiment because Europe does not want to break WTO rules and does not want to face internal disputes over tax standardization. This is CBAM. “CBAM may be able to protect the (domestic) European stainless steel industry, but we will not be able to export stainless steel from Europe.”