EU prepares CBAM export scheme

Spanish Market: Emissions, Hydrogen, Metals
17/03/25

The European Commission is preparing a "solution" for exported goods under the bloc's carbon border adjustment mechanism (CBAM), to be presented before the end of the year. The commission will also expand the scope of the CBAM to "certain" steel and aluminium-intensive downstream products.

The changes to the CBAM will be announced as part of a European steel and metals plan. In a draft of the plan to be formally presented on 19 March, the commission points to the need to address the problem of carbon leakage for CBAM goods exported from the EU to non-EU countries.

The draft also notes that the commission is currently "quantifying" risks, before proposing an extension of the CBAM to "certain" steel and aluminium-intensive downstream products, so as to address the risk of European producers relocating outside the bloc to avoid higher carbon costs.

The metals plan also announces an anti-circumvention strategy for the CBAM to be presented in the second half of 2025. The commission points to the risk of goods from low-carbon production facilities in non-EU countries being redirected to European customers, while carbon-intensive production continues for other markets.

The metals plan also points to the risk of "greenwashing" carbon accounting practices, with "electro-intensive metals production benefiting from market-based instruments to appear low-carbon".

The commission put forward proposals last month to simplify the CBAM, exempting some 90pc of the firms currently covered by the mechanism.

By Dafydd ab Iago

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

17/03/25

Timing for EU's 2040 climate goal slips

Brussels, 17 March (Argus) — The European Commission appears to have pushed back an official proposal for a 2040 climate target for the EU, which will further delay the bloc's submission of a 2035 climate plan to the UN. The commission's agenda does not include the presentation of a legal proposal for a 2040 climate target before the end of the first quarter. The commission in February 2024 confirmed its preference for a 90pc cut in greenhouse gas emissions (GHGs) by 2040, from a 1990 baseline — but this was not a formal proposal. The commission had scheduled an amendment to the European Climate Law for the first quarter of 2025. That amendment would write an intermediate target for 2040 into EU law. The 2040 target would also provide the basis for the EU's updated nationally determined contribution (NDC) — or climate plan — to UN climate body the UNFCCC. Countries and jurisdictions were expected to submit updated NDCs, covering up to 2035, to the UNFCCC by 10 February. Officials said work is "ongoing" on the bloc's 2040 climate target. It would be presented "sooner rather than later" and there is still "time left until the end of the first quarter". An EU source indicated reluctance to present a 2040 climate plan before Poland's presidential elections on 18 May, which may have a runoff on 1 June. Poland chairs meetings of EU ministers until 1 July. The source also said several other parties to the UNFCCC have missed the 10 February deadline to submit their 2035 emissions reduction targets. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Support for 45V solidifies ahead of US budget tussle

17/03/25

Support for 45V solidifies ahead of US budget tussle

Houston, 17 March (Argus) — Hydrogen advocates and industry stakeholders have redoubled efforts in Washington DC to make sure 45V production tax credits survive what is expected to be a bruising battle to pay for GOP tax cuts. "After a period of silence in January, we're seeing a sense of unity within the industry and we've gotten a lot more reception from members of Congress and the administration," said Frank Wolak, chief executive officer of Fuel Cell & Hydrogen Energy Association (FCHEA), while attending the CERAWeek S&P Global conference in Houston, Texas, last week. "That is a huge, milestone difference from even a month ago. I'm guardedly optimistic." President Donald Trump's flurry of executive decisions targeting clean energy supports inserted a new round of uncertainty for developers hoping to tap the lucrative tax credit, which came out of former President Joe Biden's signature climate bill, the Inflation Reduction Act (IRA). While the tax credit is still intact, the administration's embrace of fossil fuels has ignited concerns that 45V could be vulnerable as the GOP seek offsets to pay for a multi-trillion-dollar tax cut. As a part of the tax code, 45V requires an act of Congress to overturn it, which protects the incentive from the vagaries of executive decisionmaking but still leaves it exposed to opposing interests in a budget fight. During negotiations related to the national debt, a special parliamentary procedure can be triggered to expedite federal budget legislation by overriding the need for a super majority of votes. "Everything is on the chopping block," said Wolak. Hydrogen proponents point to the broad coalition that has emerged as an encouraging sign, with oil and gas companies throwing their political heft into the effort to protect 45V and Republican lawmakers publicly lauding the job creation by IRA-related tax credits. Powerful friends One major energy company is advocating directly and indirectly through trade associations to keep 45V intact. It believes the credits are crucial to erecting a new industry in the US and will become less necessary as the market matures and drives down costs. ExxonMobil chief executive officer Darren Woods, who expressed support for the tax credit during the company's fourth-quarter earnings call, also said the credits are an interim step for a nascent market. "We believe these incentives are critical to establishing a fully market-based future where hydrogen competes head-to-head with traditional fuels," he said in January. Last week, 21 Republican legislators whose districts have benefited economically from investments driven by the IRA issued a letter of support for incentives amid what it called "efforts to repeal or reform current energy tax credits." "Affordable and abundant energy will be critical as the President works to onshore domestic manufacturing, supply chains, and good paying jobs, particularly in Republican-run states due to their business-friendly environments," said the letter, which was organized by Rep. Andrew Garbarino (R-New York.) Garbarino issued a similar letter last fall urging House leader Mike Johnson (R-Louisiana) to protect IRA tax credits and picked up three more signatures this time. "This is significant," said Paul Dainora, chief commercial officer of electrolyzer maker Ohmium, in reference to the letter. "These tax credits are really important for our customers to build a business case." The Silicon Valley-based company is pursuing up to 250 megawatts of projects in the US this year but none of the larger projects will reach final investment decision before the fate of 45V is certain, said Dainora, who was also attending CERAWeek. The credits are considered so important for US hydrogen prospects that the chief executive officer of another global electrolyzer manufacturer has visited Washington from Europe multiple times in the last month to participate in efforts to buttress support for 45V, said a person involved in the visits who was unauthorized to speak publicly about them. Instead of focusing on hydrogen's cleaner emissions, industry talking points have coalesced around America's interest in maintaining energy dominance, said the person. Pointing to rising demand from the European Union and Asian countries like Japan and South Korea for cleaner burning fuels, 45V supporters are stressing that China is poised to dominate the industry if the US doesn't build its own hydrogen capacity. While businesses await an outcome, advocates take comfort from the fact that the process will wrap up in the next couple of months and allow companies to advance to FID. "We sat idle for two and a half years waiting for determination of what these tax rates would look like," said Wolak of the FCHEA, referring to the long period of uncertainty during which the Biden administration finalized the exact rules for 45V. "This next phase is make-or-break time but it's a short-term window. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU steel action plan to introduce melt and pour clause

17/03/25

EU steel action plan to introduce melt and pour clause

London, 17 March (Argus) — The European Commission will introduce a "melted and poured" rule as part of its steel and metals action plan, to underpin the effectiveness of its trade defence measures. The rule will mean the origin of goods is determined by the location at which the metal is originally melted, regardless of where it was further processed. This will prevent minimal transformation to evade dumping and other duties and provide greater clarity over the origin of the product, a draft of the plan suggests. The move will clearly have big ramifications for steel, where material produced in countries with duties, such as China, is further processed — for example, from hot-rolled into hot-dip galvanised — before being sent to the EU without paying duties. The commission said it will "remain vigilant, as overcapacities generated under non-market conditions may also have the effect of driving unrelated market-based producers in other third countries to export quantities to the EU that are displaced from their domestic or other traditional non-European markets". And the rule will have major implications for the EU's imports of cold-rolled and hot-dip galvanised, among other products, with one trading firm saying it would be a "game changer". European steel association Eurofer requested a melt and pour on Chinese steel as part of its request for a functional review of the steel safeguard. The commission also will "proactively" open duty investigations based on a "threat of injury" without waiting for material injury to occur. The carbon border adjustment mechanism will be extended to certain downstream products to prevent a shift to downstream goods that then avoid paying the carbon taxes required on upstream products, such as steel. European service centres and distributors have been requesting this move to protect themselves and their customers, which could face greater import penetration without an extension of the measures. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil to pilot reforestation concession

17/03/25

Brazil to pilot reforestation concession

Sao Paulo, 17 March (Argus) — Brazil's Para state in the Amazon basin will concede reforesting 10,000 hectares (ha) in the Triunfo do Xingu environmental reserve as part of efforts to protect more rainforest ahead of the UN Cop 30 climate summit in November. The 40-year concession will require R258.3mn ($45.3mn) in investments and capture an estimated 3.7mn metric tonnes (t) of CO2 equivalent (tCO2e)/yr, according to the Para state government. The 1.6mn ha Triunfo do Xingu reserve, which was created in 2006, has seen significant environmental degradation in recent years from illegal deforestation. Last year, the reserve lost 1,400km² (870 mi²) to illegal deforestation, the bulk of which was converted into pastureland. The concession, which will be Brazil's first for reforestation, will be a test case for the government's efforts to recover its tropical forests and is possible because of legislation approved in 2023, which allows carbon offsets to be issued on public lands. The auction will take place on 28 March at the B3 stock exchange, in Sao Paulo state. The winner of the project will be allowed to sell carbon offsets and environmental services credits, which will be generated by reforesting and preserving the forest. The sale of some forestry products is also approved. The Para state government estimates that the concession will generate gross revenues of R21.7mn/yr. Para will also sell two other 10,000ha concessions later this year, it said. Brazil has continued to reduce deforestation in the Amazon forest. It lost just 80.9km² of Amazon rainforest in February, down more than 64pc from the same month last year. February deforestation was the lowest on record, according to the science and technology ministry's national space institute INPE. Brazil's goal is to eliminate all deforestation by 2030. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

DRC’s cobalt ban lifts cobalt, nickel product prices

17/03/25

DRC’s cobalt ban lifts cobalt, nickel product prices

Singapore, 17 March (Argus) — The suspension of cobalt exports by the Democratic Republic of the Congo (DRC) has bolstered the cobalt market, as well as pushed up prices of nickel products. The DRC suspended cobalt exports for four months effective from 22 February, although cobalt production is likely to remain at normal levels. The news sparked concerns in the market because the DRC is the world's largest cobalt producer, accounting for 75pc of total cobalt output. Market sentiment shored up, with prices of several cobalt and non-cobalt products surging to annual highs. Argus -assessed Chinese prices for 99.8pc grade cobalt metal stood at 235-255 yuan/kg ($32.49-35.26/kg) ex-works on 13 March, the highest level in almost 1.5 years, while Argus cif China assessment for 30pc grade cobalt hydroxide hit a two-year high of $9.50-10.80/lb cif China on the same day. Cobalt prices are expected to remain buoyant if the ban is extended, given DRC's majority share of global cobalt supply. But other products such as nickel sulphate and mixed-hydroxide-precipitate (MHP) also stand to gain from the ban. Argus -assessed Chinese nickel sulphate ex-works prices rose to a five-month high of Yn27,300-28,000/t on 13 March, partly supported by the ban because cobalt sulphate is a by-product of nickel sulphate production, while the Indonesian Nickel Index (INI) for 2-5pc cobalt payable in MHP surged to a record high of $154.80/metric tonne unit (mtu) on 14 March. Indonesia, the world's second-largest cobalt producer, is expected to benefit from the ban given the expansion of its MHP capacity . Market views on the ban were mixed, with some participants expecting prices to continue increasing owing to tighter cobalt supply. But others were less concerned, noting that there was abundant cobalt material outside of the DRC. Participants continued to closely monitor the market for further developments, with speculation on a possible extension of the ban and potential export quotas that could follow. Chinese Co metal prices vs INI MHP Co prices Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more