Steel exports to EU seen dipping after carbon tax

India’s steel exports to Europe are expected to fall once the European Union’s carbon tax takes effect next month, prompting mills to seek alternative buyers in Africa and the Middle East, industry executives and analysts said. Imports of steel into the European Economic Area will face a carbon tax under the EU’s Carbon Border Adjustment Mechanism (CBAM) starting on January 1. The decarbonisation-oriented levy will also apply to cement, electricity, fertilisers and other products. Mills in India, the world’s second-largest crude steel producer after China, ship roughly two-thirds of their exports to Europe. One way to mitigate the problem is to use electric arc furnaces, which emit far less carbon than conventional blast furnaces. To offset lower exports to the EU, steel mills are trying to tap into the Middle East and are offering quick delivery and flexible payment terms, as per a report.

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