“The Council has taken a step in the right direction but it will not be sufficient to prevent carbon leakage as major loopholes remain on circumvention, downstream products and exports.” That was the verdict of Axel Eggert, director general of the European Steel Association (Eurofer), on the EU’s latest proposals for its Carbon Border Adjustment Mechanism, or CBAM.
His next sentence was shorter. “If they are not closed, carbon emissions will shift, not fall.”
The Economic and Financial Affairs Council, made up of the economy and finance ministers of the EU27, has adopted its position on the European Commission’s proposal to review CBAM. Eurofer welcomed several changes. The text now makes stronger reference to “melt and pour” rules, and it more clearly recognises the risk that producers outside Europe could get around the system through “resource shuffling.” That is the practice of sending lower-carbon steel to Europe while selling more carbon-intensive products elsewhere.
Where Eurofer Wants More
Eurofer said the EU still leans mostly on uncertain corrective measures, instead of stopping resource shuffling before it happens.
The association also objected to the member states’ decision to keep the Commission’s plan to treat pre-consumer steel scrap as a CBAM precursor, which was done without a dedicated impact assessment first. Eurofer warned this could have unintended effects on scrap markets and on Europe’s circular economy.
The Council also proposed bringing around 200 additional products containing steel under CBAM. Eurofer welcomed that, but said it falls short of full, structural coverage of steel-intensive goods. Parts of Europe’s manufacturing chain would remain exposed to imports that carry no comparable carbon cost.
Exports are the third gap. CBAM applies to imports entering the EU market, but European steelmakers selling abroad pay carbon costs that many international competitors do not. The steel industry voiced concern that no long-term solution for exporters has moved forward.
