Panic Over EU Trade Barriers... "Korean Steel Faces 17% Export Burden Due to Carbon Tax"

Greenpeace "Domestic Steel Industry to Pay Up to $472.8 Million by 2030"
Concerns Over Rapid Decline in Steel Price Competitiveness

[Sejong=Asia Economy Reporter Kwon Haeyoung] With the introduction of the European Union (EU)'s Carbon Border Adjustment Mechanism (CBAM), there is a prospect that the domestic steel industry may have to bear carbon border taxes amounting to 17% of total exports by 2030.

According to a press release distributed by Greenpeace on the 17th immediately after the EU announced its CBAM implementation plan, if the volume of steel exports to the EU remains at the current level, the domestic steel industry is expected to pay up to $472.8 million (approximately 540 billion KRW) by 2030.

Greenpeace stated, "The EU Commission expects the price of carbon emission permits to rise to 85 euros by 2030," adding, "Applying the carbon border adjustment method announced by the EU this time, the proportion rises to 16.67% of total EU exports." They further noted, "If competitors develop hydrogen-reduced steel with extremely low carbon emissions, the market competitiveness of steel products developed using existing methods will deteriorate sharply," and added, "If the scope of the carbon border adjustment mechanism expands to other export products in 2026, the damage could be enormous."

This level of damage exceeds Greenpeace's initial expectations. In a report titled 'Impact Analysis of Climate Change Regulations on Korean Exports' released earlier this year, Greenpeace estimated that the carbon border tax burden on the domestic steel industry would be $347.7 million (about 400 billion KRW) by 2030, accounting for 12.26% of total EU exports.

The Federation of Korean Industries stated, "The imposition of carbon border adjustment taxes on Korea, which has a manufacturing-centered industrial structure and high carbon intensity, raises concerns about weakening the competitiveness of the entire industry," and "the government needs to strengthen international cooperation with relevant countries to ensure that this system does not violate the principles of international trade norms, and make efforts to be exempted from the application of the EU carbon border adjustment mechanism based on domestic carbon reduction systems such as the carbon emissions trading scheme currently in operation." They added, "In the long term, please strengthen support for incentives for technological innovation related to reducing carbon emissions in high carbon intensity industries."

This content was produced with the assistance of AI translation services.