Japan and South Korea to cooperate in CBAM consultations

Japan and South Korea will cooperate in consultations with the EU on CBAM, BigMint reports.

The relevant ministries of the two countries held a steel dialogue in South Korea last week. The discussion focused on the European Cross-Border Carbon Adjustment Mechanism (CBAM) for steel and other products.

Both countries are committed to working together in response to the uncertainties associated with the European mechanism. A key issue is the confusion surrounding the CBAM reporting system, which requires detailed data on carbon emissions from steel exports to the EU.

While the initial reporting period was based on standard values provided by the bloc, the lack of clarity on future requirements is causing confusion for both exporters and steelmakers. Japan and South Korea will cooperate in consultations with the EU to resolve these issues.

In addition, there are concerns that the reporting system of the European mechanism may contradict the rules of the World Trade Organization (WTO). The countries agreed to cooperate by exchanging information on how CBAM affects their steel industries.

They also decided to increase coordination in developing carbon reduction technologies, securing scrap and green hydrogen, among other key raw materials and fuels for carbon neutrality, and setting international standards for low-carbon steel. A further meeting on green steel is scheduled for the second half of this year.

As GMK Center reported earlier, the introduction of CBAM is prompting other countries to develop their own border carbon charges, while others are considering retaliatory measures, according to a study by the International Emissions Trading Association (IETA). According to analysts, Japan, Singapore, and South Korea are the most likely supporters of the European mechanism of cross-border carbon adjustment.