EU's CBAM faces objections from Japanese steel industry

The European Union's (EU) Carbon Border Adjustment Mechanism (CBAM) is facing objections from the steel industry outside the EU. The CBAM would require importers to report data on the carbon dioxide (CO2) emissions of imported products, such as steel and aluminum. Prior to full-scale implementation (January 2026), the EU will require importers to report data such as carbon dioxide (CO2) emissions of imported products from October this year (2023).

Concerns from steel industry groups

The steel industry in countries such as South Korea, India, Turkiye and Argentina have raised concerns about the CBAM, saying that it violates World Trade Organization (WTO) rules. They argue that the system unfairly disadvantages imported goods and gives domestic producers an advantage.

Objections from steel users in the EU

Steel users in the EU have also raised objections to the CBAM. The European Fastener Distributors Association highlighted that regulations on imported goods are stricter than those on products manufactured within the region, particularly for steel products. They completely rejected the European Commission's draft, stating that they have no choice but to reject or boycott it.

Supportive voices from the European steel industry

Interestingly, the European steel industry did not raise clear objections to the reporting system itself. In fact, some prominent voices, such as the European Steel Confederation, suggested that the data submitted by importers should be made available to the public.

Problems identified by the Japan Steel Federation

The Japan Steel Federation (JSF) has also pointed out problems with the CBAM. The federation said that the system requires importers to submit data that is not required for steel manufacturers in the EU, and this unfairly disadvantages imported goods.

The Federation also said that the system requires reports on the proportion of steel scrap and ferro alloys used in product manufacturing, which has nothing to do with global warming countermeasures.

Outlook
The CBAM is still under development, and the EU is likely to make changes to the proposal in response to the objections from the steel industry. The CBAM is scheduled to be implemented in January 2026. However, the objections from the steel industry could delay or even derail the proposal.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.