Following the European Parliament’s reforms passed on February 15 aimed at increasing the price of carbon by cutting emissions allowances granted to firms and the proposal of a carbon tax on steel imports supported by EU steel producers, the Turkish Steel Exporters' Association (CIB) and the Turkish Steel Producers’ Association (TCUD) have released a joint statement on the European Union Emissions Trading System (EU ETS) reform and its implications for the steel industry.
In the joint statement, the TCUD and CIB stated that the additional costs domestic producers will face due to the ETS system vary according to their technologies and trying to eliminate an unequal cost for each company through a fixed rate to be imposed on imports would not only cause unfair competition but also further deepen the differences among companies and the imposition of a carbon tax not applied to domestic producers would be contrary to the World Trade Organization (WTO) rules. According to the statement, the calculation for the carbon tax to be imposed on imported steel products from a wide range of sources would lead to confusion and disorder due to practical challenges such as the identification of an equivalent product and calculation of the carbon contents. Due to technological advancements, it would not be fair to impose the same tax on an efficient plant and an inefficient plant, the statement added.
The TCUD and CIB concluded that, considering the abovementioned issues, it would not be rational to apply the additional costs to be introduced by the ETS to imported products as well; also, such a practice would lead to an increase in similar trade remedies and render regulations on mitigating carbon emissions inapplicable.