European steelmakers are also concerned about the mechanism's impact on exports from the bloc
The final implementation of CBAM could lead to an increase in the price of imported steel by approximately 15%. The Italian trade association Assofermet warns about this, reports Kallanish.
As the president of the Assofermet steel division Paolo Sangoi notes, the association welcomes the collective commitment to promote a sustainable economy and reduce the impact of industry on the environment. However, the EU should pay more attention to the economic consequences of CBAM implementation – if they are not radically revised, there is a risk of undermining the competitiveness of an important part of the EU’s manufacturing sector.
«The cost of steel coming from non-EU territories may increase by up to 15%. This will have serious consequences for the entire Italian and European economy,» Sangoi said.
He also added that the mechanism is complex and its procedures remain unclear.
At present, CBAM applies only to certain steel products, affecting end-users and downstream companies, which favors importers of finished products, notes Sangoi.
The transition period of carbon border adjustment mechanism will end at the end of 2025. Until then, buyers will have to comply with only part of its provisions. Assofermet hopes that by the time the final implementation of the CBAM begins, on 1 January 2026, the EU will be able to change its approach to the measure to reconcile the environmental transition with the economic consequences.
The European CBAM, after full implementation in 2034, will significantly increase the costs of steel imports from India and China, according to the consulting company Wood Mackenzie, informs Reuters.
CBAM tariffs from that period could increase the cost of steel delivered to the EU by around 56% for India and 49% for China. At the same time, according to the World Steel Association, these two countries account for 6% and 54% of global steel production.
«The cost of CBAM for some key exporters to the European Union may exceed $275 per ton of rolled steel. For reference, in 2022, the average import price of steel products covered by the CBAM was about $1,450/t,» the consulting company said.
Wood Mackenzie notes that one of the first reactions of exporters is likely to be to reorganize sales. Steel products with lower carbon emissions will be directed to the European market, while others will be redirected to markets without carbon taxes.
The EU plans to monitor and review these strategies, but the bloc has no concrete action plan to prevent them.
Europe’s steelmakers are concerned not only about the import, but also about the export of steel from the EU in connection with the implementation of CBAM, reports Kallanish. According Flavio Breganto, CEO of the Italian association of steel producers Federacciai, the European Commission will consider the issue of exports in 2025, while steelmakers have repeatedly pointed to certain problems.
From the beginning of 2026, the rejection of the allocation of free quotas under the Emissions Trading System (ETS) will begin, which will increase the production costs of European steel companies to ensure a green transition, making them less competitive in the international steel market.
As GMK Center reported earlier, steelmakers of Latin America call for continuation of deadlines under CBAM – it is difficult for the industry of the region to meet the established requirements for further access to the EU markets in a timely manner. And China notes that the European Union has ensure compliance for mechanism of WTO rules.