Green steel exports unviable with present CBAM: AM/NS

Market: Metals
25/09/23

Exports of green steel from India are not feasible by 2026 with the current policies of the EU's Carbon Border Adjustment Mechanism (CBAM), ArcelorMittal Nippon Steel (AM/NS) India's chief executive Dilip Oommen told Argus on the sidelines of India Energy Transition Summit.

"We are working on it… (but) CBAM in its present form requires changes," Oommen said on 25 September.

EU's CBAM will enter a transitional phase next month when importers will have to collect fourth-quarter greenhouse gas emissions (GHG) data from 1 October 2023, and submit a first report by 31 January 2024.

Once the permanent system is in force on 1 January 2026, importers will need to declare the quantity of goods imported into the EU in the preceding year and their embedded GHGs. They will then surrender the corresponding number of CBAM certificates, whose price will be calculated based on the weekly average auction price of EU Emissions Trading System allowances, expressed in €/t of CO2 emitted.

EU was the top finished steel export destination for Indian steelmakers during the April 2022-March 2023 fiscal year with total exports of 2.34mn t, and has been the preferred choice for Indian steel exports in the current fiscal year owing to higher prices compared to other regions.

"We have an advantage that 65pc of our iron making is using natural gas, which no other plants have in India," Oommen said adding that some steps are already in place to produce greener steel.

Indian steelmakers have started to take steps to lower their carbon emissions by announcing collaborations with technology companies to decarbonise and even trial injecting hydrogen in blast furnaces, but significant reductions in CO2 seem to be far away.

The Indian steel ministry has also approved 13 task forces to define the roadmap for green steel, in a step towards lowering carbon emissions from the industry, which accounts for about 8-10pc of carbon emissions in the country. But steelmakers have asked for policy enablers from the government.

India's commerce ministry has been engaged with the EU to negotiate CBAM rules as the country believes developing countries should not be burdened with the same responsibilities as developed countries to curb emissions.

By Rituparna Ghosh & Sumita Layek

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