Chinese steelmakers are coordinating their efforts in response to the European CBAM

China’s leading steel producers are coordinating their efforts in response to the full implementation of the European Union’s Carbon Border Adjustment Mechanism (CBAM), according to the South China Morning Post.

This involves adjusting export strategies, compliance systems, and pricing models.

As noted by Jiang Wei, vice chairman and secretary-general of the China Iron and Steel Association (CISA), indirect steel exports from China to the EU are significant, and a large portion of them consists of high-value-added products.

“As CBAM expands downstream, the transmission effects along the industrial chain will be further amplifie,” he added.

The remark was made during an online industry meeting held in early April. It was attended by over 100 of the country’s steel producers and stakeholders in the mining and processing industries. Among the key issues discussed were the recognition of emission factors, pre-verification procedures, testing methodologies, and data security.

Chinese companies are facing both rising export costs due to carbon taxes and increasingly stringent disclosure requirements regarding carbon footprint transparency. Industry experts expect carbon costs to cascade down the supply chains, increasing compliance costs for the country’s exporters.

Chinese regulators are seeking to ease the pressure through engagement with the EU. In particular, Wang Tian, deputy director of the Cooperation Division of the Climate Department at the Ministry of Ecology and Environment, noted that the parties have held several rounds of discussions on key issues, such as emission factors. Beijing seeks to ensure recognition of China’s domestic metrics and to improve its national greenhouse gas database to reduce compliance costs.

As a reminder, in March of this year, Turkey and the European Union, at a working group meeting, considered, among other things, the technical aspects of the CBAM. In particular, they discussed the recognition of verification processes that would allow Turkish exporters in relevant sectors to use actual emission values instead of standard indicators.