Canada plans to introduce its own CBAM analog

Canada needs a cross-border carbon adjustment mechanism for imports from jurisdictions that do not have a carbon price. In addition, the country should use local low-carbon steel in public infrastructure projects. This is stated in an article by Marty Warren, National Director of the United Steelworkers of Canada (USW).

In his opinion, amid global efforts to reduce greenhouse gas emissions, Canada has the opportunity to rebuild its public infrastructure with less carbon. He reminded that the federal government has committed to achieving net zero by 2050. However, important components of this strategy are currently missing, such as a vision for the materials to be used.

Warren believes: Canada should use its relatively low-carbon steel in all public infrastructure projects. In addition, the country should pursue an industrial policy that supports a strong domestic steel market. To do this, it is necessary to jointly encourage technological investment to further reduce the industry’s carbon footprint.

The USW National Director also emphasized that the government must ensure that its plan to introduce a carbon price does not unfairly disadvantage Canadian steel producers. Therefore, the union advocates for the introduction of a cross-border carbon adjustment mechanism for imports from jurisdictions that do not have a carbon price. Such duties have already been introduced in the EU and are being considered in the US.

Warren also pointed out that Canada’s steel industry is suffering from rising imports, which are increasingly displacing domestic production. Currently, foreign supplies account for 61% of the domestic steel market. For example, the market share for countries outside the US and Mexico doubled from 2015 to 2022.

The USW’s national director welcomed US President Joe Biden’s recent decision to increase Section 301 tariffs on certain Chinese steel and aluminum products from 0.0-7.5% to 25%. He believes: Canada must do more to strengthen its anti-circumvention measures.

“If Canada wants to maintain a healthy steel industry in the future, trade, climate and jobs policies must go hand in hand,” Warren said.

As GMK Center reported earlier, Canadian steelmakers called on the authorities to take more active steps after the United States announced that it would increase tariffs on certain Chinese steel and aluminum products.