The Union said that the introduction of CBAM in Europe risks the diversion of large quantities of imported steel to the UK. The Union warns that up to 23 million tonnes of non-EU steel could flow into the UK, which consumes only 9 million tonnes of steel a year.
In addition, the European CBAM system could limit steel exports from the UK to Europe unless a similar UK CBAM is implemented. The UK exports more than 2.5 million tonnes of steel to Europe each year, accounting for 75% of total steel exports.
"By implementing its own Carbon Border Adjustment Mechanism, the UK is removing a trade barrier to the steel industry's largest market, halting the risk of trade diversion and creating a market for low carbon steel, which is vital to UK plc's Net Zero transition," said UK Steel.
The European CBAM will be implemented in a transitional phase from 2024 before coming into full force in 2026.
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