British equivalent of CBAM will affect stainless steel imports – MEPS

Plans to introduce a tax on imports of carbon-intensive products in the UK could affect the cost of stainless steel supplies to the country, according to MEPS.

The UK is already dependent on stainless steel imports, so it is not currently imposing any protective measures or other trade restrictions on products from abroad.

In 2022, the country imported 282.2 thousand tons of imported stainless steel, a 7% decrease over the past five years. From the beginning of 2023 to the end of October, foreign supplies of these products decreased by 11.6% year-on-year, according to ISSB data, but in October these volumes increased significantly.

Many British industry organizations have responded positively to the national plans to introduce a CBAM equivalent, recognizing that they protect the domestic industry. However, in the experience of national stainless steel traders, the scheme could mean additional administrative burdens and higher import prices due to carbon costs.

As GMK Center reported earlier, Great Britain until 2027 plans to introduce a tax on imports of carbon-intensive products, particularly steel, as an attempt to protect domestic producers from cheap imports from countries with less stringent climate policies. The size of the tariff will depend on the amount of emissions during the production of the imported product, as well as on the difference in the price of carbon between the country of origin and Britain.

Also, in April 2023 the British government started consultations on a range of potential policy measures, including CBAM, to reduce the risks of future carbon emissions and provide domestic industry with an optimal policy environment for decarbonisation.