At the 16th SteelOrbis Steel Conference “New Horizons in Steel Markets” held today, December 1, in Istanbul with the participation of approximately 900 participants including 300 on-site, Muammer Bilgiç, general director of Bilecik Demir Çelik, stated that the Turkish steel industry is one of the sectors that will be impacted the most by the EU’s Carbon Border Adjustment Mechanism, as the EU market holds a 45-50 percent share in Turkey’s total exports. According to Bilgiç, with the commissioning of the carbon border tax as one of the tools to be used within the scope of carbon transformation in the EU, the aim is to force untransformed countries to transform. While the emissions trade system, which includes the carbon credit system and carbon tax, is already in practice in the EU since 2005, it was adopted by China in the summer of 2021 and Turkey is expected to make a move on this issue by the end of the current year, Mr. Bilgiç said.
The Bilecik Demir Çelik official continued: “The current carbon tax in the EU is at €70/mt and approximately at $10/mt in China, which has newly adopted the system. There are 65 territorial and regional carbon emissions markets in total, while the market value is $268 billion and forecasts for the market value in 2050 come to $22 trillion. When you achieve a carbon credit equal to a non-reducible or economically non-reducible emissions amount, then you will be named as a carbon-neutral or carbon-free country.”
According to the information Mr. Bilgiç shared, during the process of carbon border tax implementation, registrations will be taken in the 2023-26 period and carbon border tax payment will start in 2026. The EU, which aims to be carbon-free by 2050, is planning to decrease emissions by 50-55 percent in 2030 as compared to the 1990s. “As for me, the carbon border tax is the simplest of sanctions. In the new world order, countries and companies which do not catch up with the emission goals of the 2030-50 period will neither be able to get credits nor will they have a position in the global economy even if they pay the tax,” Mr. Bilgiç said.
According to Mr. Bilgiç, although steel production by using scrap is an advantage, it would be wrong to say that the Turkish steel industry does not also have a big problem in relation to this as it is far from reaching the carbon-free production goal. He also stated that the main amount of carbon emissions is resulting from scrap usage and the way to decrease emissions in electric arc furnaces is to increase melting efficiency. Meanwhile, carbon emissions resulting from logistics are likely to put additional pressure on the Turkish steel industry, which has to import almost 70 percent of its raw material needs. Bilgiç stated that it is inevitable that the global warming limit of 1.50C in 2040 will be surpassed and that the goal has to be to keep it below 20C.