EUROFER: EU ministers are making progress, but loopholes remain to circumvent sanctions, processing and exports
Eurofer notes the improvements made by EU ministers to the proposed reform of the carbon emissions Regulation Mechanism (CBAM), but warns that loopholes remain that could weaken both Europe's climate ambitions and the competitiveness of industry.
At today's meeting, the Economic and Financial Affairs Council (ECOFIN), which is attended by the Ministers of Economy and finance of the 27 EU countries, approved its position on the European Commission's proposal to review the CBAM. The European Steel Manufacturers Association (EUROFER) noted a number of improvements, including stricter references to smelting and casting regulations and a clearer awareness of the risk that producers outside Europe could circumvent the system by reallocating resources.
Axel Eggert, CEO of EUROFER, said: "The Council has taken a step in the right direction, but this will not be enough to prevent carbon leakage, as serious loopholes remain for bypassing, recycling and exporting. If they are not closed, carbon dioxide emissions will change rather than decrease."
One of the most serious problems of the steel sector is the redistribution of resources. This happens when foreign manufacturers supply low-carbon steel to Europe while continuing to sell more carbon-intensive steel in other countries. Although the Council's proposal is more aware of this risk, it is still largely based on vague corrective measures rather than prevention.
The Council also proposes to extend CBAM to about 200 more steel-containing products. EUROFER welcomes this expansion, but warns that it does not provide comprehensive and structural coverage for many steel products, leaving individual parts of the production chain in Europe exposed to imports that do not carry comparable carbon costs.
EUROFER also regrets that Member States supported the Commission's proposal to include ready-to-use steel scrap as a precursor to CBAM without a prior impact assessment. The Association warns that this could lead to unforeseen consequences for the scrap metal markets and the European closed-loop economy.
The Council also amended article 27a, which sets out the conditions for the temporary exclusion of goods from the scope of CBAM. Instead of relying on such an unpredictable "emergency braking" mechanism, a more effective approach would be to adjust the pace of transition from CBAM to free allocation of funds.
Finally, the steel industry expressed concern that in a long-term solution