US steelworkers support cross-border carbon tax proposal

The Foreign Pollution Fee Act of 2023 has been introduced into the US Senate. reports Recycling Today.

Document is submitted by Louisiana Republican Bill Cassady. If passed, the legislation would impose cross-border carbon levies on imports of steel and other products.

The Foreign Pollution Fee Act of 2023 is generally supported by the American Iron and Steel Institute (AISI) and the Steel Manufacturers Association (SMA).

“Over the past fifteen years, the United States has reduced more emissions than any other country, and our economy is 44% carbon efficient than the global average,” states the document released by Senator Cassidy.

Similar comments are regularly made by steel executives in the US, including electric arc furnace producers (Nucor, Steel Dynamics) and two blast furnace operators (Cleveland-Cliffs and US Steel).

The proposed legislation does not focus solely on steel. The idea is that its effect will extend to energy products such as natural gas, oil, hydrogen, minerals, solar panels and windmills, as well as aluminum, cement, glass, pig iron, petrochemicals and paper products.

According to the table detailing the levy, U.S. aluminum, pig iron, steel, paper and other products covered by the law are given a 1 point for carbon intensity. Meanwhile, metals produced in China have 1.7 points, and the Russian Federation has 3.7 points of carbon intensity.

Associations representing U.S. steelmakers believe that the polluter pays principle is the right way to reward the American steel industry for its emissions reduction efforts and investments.

“Solution-focused proposals like these benefit the American steel industry. The United States produces the cleanest, lowest-emission steel products in the world. Such a policy will encourage manufacturers with high levels of emissions to take the necessary measures to reduce them and gain the right to sell products on our market,” noted Philip K. Bell, President of SMA.

He added that as the bill progresses, it will be important to focus not only on China, but also on other regions of the world that have non-market excess steel capacity.

“Establishing a comprehensive cross-border fee that would require importers with high carbon emissions to pay for those emissions would help level the playing field and ensure that the efforts of U.S. manufacturers who invest in cleaner production processes are not undermined,” says Kevin Dempsey, President and CEO of AISI

However, Dempsey, like Bell, has the issue of how many countries could be covered by the cross-border tax – an aspect the AISI president believes still needs work.

As GMK Center reported earlier, the mechanism of transboundary carbon adjustment is important factor to decarbonize the US steel sector, according to AISI.