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Korea Times reported that the European Union's Carbon Border Adjustment Measure is expected to take a toll on South Korean steel makers. The report quoted a steel industry official as saying that "The EU carbon border adjustment tax will affect all local industries that emit greenhouse gases. In particular, the steel industry will be impacted the hardest. There needs to be a national strategy and the industry and government need to cooperate to minimize any negative effects from the measures.”

 

The report added that South Korean government scrambling to brainstorm countermeasures before the new measure takes effect in 2023. South Korea’s Ministry of Trade, Industry and Energy has initiated a study of carbon border tariffs' impacts on the local steel industry while coming up with strategies to enhance local competitiveness. The ministry said "The carbon border adjustment measures will establish new trade barriers, which will have a drastic effect on our overall industry, as the country is heavily reliant on exports. If we do not prepare in advance, our competitiveness in steel exports will experience a significant decline due to its nature as a high emitter of carbon."

 

The measure is aimed at increasing tariffs on imported goods based on the level of carbon content, in an effort to slash carbon emissions and reduce their impact on climate change. The measure will mark the world's first tax on carbon contained in traded goods. It will be applied heavily to the production of steel, which emits large amounts of greenhouse gases relative to other industries. The carbon border tax will be applied to steel products that emit more carbon emissions than those made in EU member states. The EU plans to unveil the draft bill on July 14, while applying the tax in phases starting in 2023 to products that have high carbon emissions, including steel, aluminium and cement.

 

The Korean government has unveiled a vision of achieving carbon neutrality by 2050 and seeks to establish an action plan to better fulfil that goal. Through hydrogen-based steelmaking, the country's leading steelmaker plans to cut carbon emissions by 20 percent by 2030 and 50 percent by 2040. However, many experts remain sceptical about the country's goal of achieving carbon neutrality by 2050. A source said "Local companies have been announcing measures to become carbon neutral first without having the means to do so, in order to please the government. However, it will be nearly impossible to fulfil the carbon neutrality goal within the stated period. Not only the companies, but also the government and lawmakers need to be on board with this goal. They need to be working together in passing new laws to aid companies' efforts, so that they have a chance to meet the 2050 goal.”

source：SteelGuru Business News