Jacques Delors Institute: Global implications of the EU steel strategy beyond CBAM
A new discussion paper published by the Jacques Delors European Institute provides a comprehensive analysis of the external aspects of the European Union's Steel and Metals Action Plan (SMAP).
While much of the recent industry dialogue has focused on the Carbon Dioxide Emissions Regulatory Framework (CBAM), this paper, titled "The Big Picture: Global Implications of the EU Steel Strategy beyond CBAM," argues that the EU is creating a complex web of cumulative regulations. The authors suggest that without careful coordination, these measures could inadvertently create a "green spaghetti bowl" of regulation that would complicate international trade and potentially weaken decarbonization efforts abroad.
The document analyzes four key elements of the EU strategy and their potential cross-cutting impact on the global steel market.
1. Carbon Leakage Prevention (CBAM)
The document notes that due to the gradual abolition of free benefits between 2026 and 2034, CBAM will create significant problems for trading partners. The authors identify special risks for small and medium-sized enterprises (SMEs). Due to the lack of emission monitoring and verification (MRV) capabilities, small and medium-sized enterprises may have to rely on "default values". The document warns that without support, these values can become a structural constraint, increasing costs regardless of the company's actual carbon efficiency.
2. Creation of lead sales markets (labeling "Low carbon steel")
The EU intends to introduce voluntary labeling of "low carbon steel" to justify "green" surcharges. However, the analysis warns that this voluntary standard may actually become an obstacle to market access if it is widely implemented. The authors point out possible contradictions in definitions; for example, if the EU definition differs from those of trading partners (for example, if it is based on absolute emissions rather than a sliding scale of waste accounting), this may lead to the exclusion of foreign producers from the "green" segment of the EU market.
3. Ensuring cyclicity (ESPR and waste management restrictions)
The article examines the external impact of the Regulation on Ecodesign for Sustainable Products (ESPR), which introduces mandatory requirements for durability, the content of recycled materials and the digital passport of the product (DPP).
Compliance costs: These requirements create high compliance costs and require a digital infrastructure that many exporters may lack.
Scrap export: In the document