Korean steel manufacturers, already navigating export barriers from U.S. tariffs, are now urgently preparing for the European Union’s Carbon Border Adjustment Mechanism (CBAM), which enters full effect in January. The industry is concerned that the combination of existing trade levies and upcoming carbon-related charges could significantly weaken the international price competitiveness of Korean steel. During the current CBAM transitional period, companies must only report emissions, but from next year, importers will need to pay for carbon embedded in products like steel and aluminum—bringing their costs in line with EU domestic producers. This is especially challenging for Korea, where around 70% of steel is produced using carbon-intensive blast furnaces. These methods are used to make some of Korea’s top steel exports to the EU, including hot-rolled sheets and heavy plates.
Facing a potential cumulative CBAM cost of at least 3 trillion won ($2.12 billion) over the next decade, Korean steelmakers are accelerating their shift to low-emission technologies. Key solutions include hydrogen-based steelmaking, which replaces coal with hydrogen to reduce iron before it's processed in electric arc furnaces. Leading firms like Posco are also investing in carbon capture and reuse technology in collaboration with partners such as LG Chem. Meanwhile, the U.S. is also proposing its own carbon border policies, indicating a global trend. To stay competitive, Korean steel companies are working with the government to improve emissions tracking and achieve international certifications. Industry leaders stress the need for strategic public support to enable the transition to greener steel production on a larger scale.
To help businesses navigate these challenges, CBAM Reports provides support with calculating
embedded emissions, preparing CBAM reports in
XML format, validating data, and ensuring seamless import into the CBAM registry. Contact CBAM Reports today for tailored assistance in achieving CBAM compliance efficiently.
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