The Carbon Border Adjustment Mechanism (CBAM) is raising significant concerns among European stainless steel producers. As CBAM enters its operational phase, industry leaders are grappling with its potential impact on their businesses.

One of the primary concerns is CBAM's limited scope within the production cycle. While the mechanism focuses on emissions from steel production, it doesn't fully capture the carbon footprint of the entire value chain, including Scope 3 emissions associated with raw material sourcing. This could put European producers at a disadvantage, as Asian competitors often rely on carbon-intensive materials like nickel pig iron (NPI) due to lower scrap availability.

“If we based our stainless steel industry on scrap only, we would produce less than 30 million metric tons melting per year (globally), while currently we are around 60 million tons,” says Marcus Moll, CEO of analyst firm SMR.

European steelmakers are calling for a fair global approach to carbon pricing. While they acknowledge the decarbonization efforts underway in Asia, they argue that these efforts fall short of the strict standards set by the European Commission. If a global consensus isn't reached, European producers fear they may be driven out of business.

'If there is not a level playing field, then European industry will disappear - CBAM is bad, it's an experiment and no one knows how it will work. We should have something more global across the value chain, including for finished products', says Timoteo Di Maulo, CEO of Aperam.

Source: https://www.hellenicshippingnews.com/cbam-in-current-form-has-no-benefit-for-european-stainless-steel-industry-ceos/

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