Leading steel producers in China are taking coordinated actions in response to the full implementation of the European Cross-Border Carbon Adjustment Mechanism (CBAM). The new requirements are forcing companies to reassess their export strategies, improve compliance systems, and alter pricing approaches to meet the stricter environmental standards of the EU.
This is reported by Finway
Impact of CBAM on Chinese Steel Exports
Vice President and Secretary General of the China Iron and Steel Association (CISA) Jiang Wei emphasized that a significant portion of steel exports from China to the EU is conducted indirectly and includes high value-added products. The introduction of CBAM creates new challenges for manufacturers as the effects of the new rules ripple throughout the industrial chain.
“As CBAM expands downstream, the transmission effects along the industrial chain will intensify further,” he added.
New Challenges and Regulatory Steps
At an online meeting held in early April, over 100 Chinese steel manufacturers and representatives from the mining and processing sectors discussed key issues, including the recognition of greenhouse gas emission coefficients, pre-verification procedures, testing methodologies, and data security measures.
Chinese metallurgical companies are facing rising export costs due to carbon taxes and increasing transparency requirements regarding their carbon footprint. Analysts predict that these costs will continue to rise, spreading across all supply chains, complicating compliance for Chinese exporters.
Chinese regulators are trying to alleviate the burden by actively cooperating with the EU. Wan Tian, Deputy Director of the Cooperation Department of the Climate Department of the Ministry of Ecology and Environment of China, noted that the parties have held several rounds of negotiations on key aspects, including emission coefficients. Beijing aims to achieve recognition of its internal metrics and improve the national greenhouse gas database, which is expected to help reduce compliance costs with the new requirements.