Japanese industry raises concerns over EU's Carbon Border Adjustment Measures

At a recent meeting between the European Commission and Japanese industry to discuss the EU's Carbon Border Adjustment Measures (CBAM) for steel and aluminum, the Japan Iron and Steel Federation (JISF) highlighted the industry's concerns.

CBAM overview

CBAM is a system that imposes a levy on imported goods from countries and regions that are not enthusiastic about global warming countermeasures. The EU launched a reporting system in October 2023 ahead of its full-scale introduction in January 2026. Six types of imported products are eligible, including steel, aluminum, and cement.

Japanese industry concerns-

During the seminar, Mr. Toru Ono, advisor of JISF, highlighted the following problems with CBAM:

• Consistency with WTO rules: Mr. Ono expressed concern that CBAM may violate World Trade Organization (WTO) rules.
  
  
• Penalty provisions in the reporting system: Mr. Ono also criticized the penalty provisions in the reporting system, which he believes are too harsh.
  
  
• Obligation to report detailed data: Mr. Ono emphasised the obligation to report detailed data under the reporting system is burdensome for the steel industry and other sectors.
  
  

Specifically, under the reporting system, importers are required to report detailed data such as the carbon footprint of the product to the EU authorities when exporting the product into the EU. Exports for the October-December period must be submitted by the end of January next year. However, many say that the data required by the EU is enormous and detailed, and that it is difficult for the steel industry and others to respond.

Conclusion

The EU's CBAM is a complex and controversial measure. It is important for the EU and Japanese industry to continue to engage in dialogue to address the concerns of both sides.

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