Some customers are looking for alternatives outside of Europe to import finished steel products

Representatives of service centers are concerned about the impact of the European Cross-Border Carbon Adjustment Mechanism (CBAM) on the metalworking industry. This was discussed at a meeting of the Eurometal working group, which brought together sector leaders from Germany, Austria, the Netherlands and Belgium.

Suppliers from Asia are currently looking for workarounds, the discussion went on, which threatens the European metalworking industry and service centers, and ultimately European steel mills.

Frightened by the impact of the CBAM, some large customers (Tier 1) are looking for external alternatives outside European borders and are choosing to import ready-to-use steel products to circumvent the regulation. This trend is of deep concern to service centers, especially given the current period of moderate market activity. They are already facing the need to invest heavily in decarbonization and cost optimization, and CBAM makes the situation more stressful.

The future of European service centers will depend on the sector’s ability to adapt to the requirements of the mechanism while remaining competitive, and cooperation and innovation are likely to be key factors.

As GMK Center reported earlier, the International Chamber of Commerce (ICC) has identified a number of problems faced by companies during the first reporting period of the CBAM transition phase and invited the block to engage in a dialogue on these issues. These include access to the reporting platform, which differs from one EU member state to another, making it difficult for businesses to navigate, high administrative burden, data collection and calculation of embedded emissions, etc.