Assofermet, the association representing Italian distributors of scrap, raw materials and steel products, has denounced critical aspects of the Border Carbon Adjustment Mechanism (CBAM), due to start on October 1, declaring, "We fully support the environmental emission reduction targets, but more attention must be paid to the economic consequences."
With only a few weeks to go before the start of the CBAM transition period, Assofermet has highlighted the limitations of the mechanism that could severely damage an entire economic sector. The Border Carbon Adjustment Mechanism is the measure promoted by the European Union to introduce a kind of new "environmental customs duty" that will aim to discourage the import of carbon-intensive products, and among the various goods to which the mechanism will be applied are steel and aluminum, two of the sectors to which the activities of Assofermet pertain.
The association has estimated that the final implementation of the CBAM may lead to an increase of about 15 percent in steel import prices.
"Leaving aside now the lack of clarity of the legislation, an aspect that we hope will be overcome as soon as possible, one of the most critical points of the current CBAM approach is that it only applies to certain steel and aluminum products," said Assofermet, which added that, in addition to concerns about the measure’s inflationary effects, the mechanism should apply erga omnes across the entire steel and aluminum supply chain to avoid market distortions. "The current approach mainly harms end-users, including producers of goods and manufactured goods downstream in the supply chain: it exposes them to unequal competition with importers of finished products, on whom there would be no restriction or taxation regarding CO2 emissions during their production process," the association commented.
Assofermet said that it therefore hopes that, before the final period begins on January 1, 2026, the European Commission will be able to change the mechanism's approach to reconcile the fair and necessary environmental transition with the inevitable economic consequences that will result from the Green Deal and the Fit For 55 legislation.