US-based management consulting company Boston Consulting Group (BCG) has stated that the EU carbon tax, which will be applied with the Carbon Border Adjustment Mechanism (CBAM) in 2026, will cause European steel importers to face additional costs of around €2 billion annually by 2030, when the price of carbon in the EU is projected to reach more than €100/mt.
The magnitude of those costs will depend on the carbon efficiency of each producer. BCG analysis suggests that by 2032 the cost of iron and steel imported into the EU from the US and UK could rise by six percent (€102/mt and €134/mt, respectively), from Turkey by 10 percent (€144/mt), from South Korea by 12 percent (€154/mt), from China by 17 percent (€184/mt), and from India by 32 percent (€246/mt).
According to the statement, as the CBAM covers more goods, the inflationary pressure will be felt more widely. A midsize family car responsible for around 7 mt of carbon emissions, for example, would attract a levy of around €700 at projected carbon prices.
